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The Chinese online retailer, which already has stock listed in the U.S., opened at HK$239 after raising $3.9 billion in its Hong Kong share sale. That’s after its shares changed hands in gray markets at a roughly 5% premium to its HK$226 listing price in the days prior.
JD debuts as tensions between Washington and Beijing threaten to curtail Chinese companies’ access to U.S. capital markets, particularly after once high-flying Luckin Coffee (NASDAQ:LK) Inc. crashed amid an accounting scandal. It’s a victory for Hong Kong, coming on the heels of Alibaba (NYSE:BABA) Group Holding Ltd.’s $13 billion share sale and the passing of a national security law that critics fear could jeopardize its status as a financial hub. Fellow internet giant NetEase (NASDAQ:NTES) Inc. gained 6% in its own Hong Kong coming-out party last week.
“We hope investors from China and Asia can better understand JD’s concept, service and future development,” JD Retail Chief Executive Officer Xu Lei told Bloomberg Television. “Hong Kong is one of the freest economies in the world. We hope to have many mature institutional and individual investors share JD’s growth.”
Read more: Alibaba, JD Test Virus Recovery With Online Sales Extravaganza
JD and its rivals will now put China’s nascent consumer spending recovery to the test when they wrap up the country’s biggest online shopping gala of the post-pandemic era. China’s largest retailers are hoping the “6.18” or June 18 extravaganza that began this month unleashed pent-up demand, making up for lost sales during a coronavirus-stricken March quarter.
Global brands and smaller merchants alike stocked up on goods for months in anticipation of the summer event, a bargains buffet surpassed only by the Nov. 11 Singles’ Day in scale. JD and Alibaba are expected to release final results of their haul after midnight.
Longer term, the company will use the proceeds of the stock sale to continue building its logistics and delivery network, a key advantage during the pandemic because JD could better control shipping.
“The process to build up a supply chain is very time consuming and cost consuming, but we want to make it better,” Xu said. “When we have better supply chain, it would bring in a better user experience.”
©2020 Bloomberg L.P.
