By Jiahui Huang
Shares of Tencent-backed J&T Global Express edged lower early in their trading debut in Hong Kong, coming after the Chinese logistics company raised US$501 million in an initial public offering to fund expansion in Southeast Asia and other markets.
Shares of the Shanghai-based company were last at 11.86 Hong Kong dollars in midmorning trade Friday, down 1.2% from their IPO pricing of HK$12.00.
J&T Global raised gross proceeds of HK$3.92 billion (US$501.2 million) in its offering to develop logistics networks and warehouse capacity in Southeast Asia, expand to new markets and fund research and development, among other uses. It could raise an additional HK$567.2 million in net proceeds if an overallotment option is exercised in full.
The international component of the offering was 1.9 times oversubscribed, with cornerstone investors taking up almost 40% of all offered shares. Cornerstone investors included Chinese tech giant Tencent, private-equity firms Hillhouse Capital and Sequoia Capital, and Singapore sovereign-wealth fund Temasek.
J&T Global started operations in 2015 in Indonesia and now provides express delivery services in 13 nations, including countries in Southeast Asia and Saudi Arabia, the United Arab Emirates, Mexico, Brazil and Egypt.
In the first half of the year, the company posted a gross profit, with revenue growing 18.5% from a year earlier to US$4.03 billion.
J&T Global said it expects to continue recording net losses in 2023 “as we continue to incur significant non-operating expenses driven by our share-based payments and compensation expenses, finance costs and other selling, administrative and general expenses.”
Morgan Stanley, BofA Securities, CICC and UBS were among advisers on J&T Global’s IPO.
The company is one of several to list this month in Hong Kong in what has been a weak year for new offerings. The Hong Kong exchange said this week that IPO funds raised in the city in the first nine months of the year fell to HK$24.6 billion from HK$73.7 billion in the same period last year.
J&T Global competitors SF Express and Cainiao are also planning offerings in Hong Kong.
Write to Jiahui Huang at [email protected]
Read the full article here
