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Chinese health care platform JD Health raises US$3.5 billion in Hong Kong's second largest IPO this year

Georgina Lee georgina.lee@scmp.com
·4 min read

JD Health, the health care arm of Chinese e-commerce giant JD.com, has priced its initial public offering (IPO) at HK$70.58 (US$9.1) per share, according to people familiar with the transaction, which will see it raise US$3.5 billion in Hong Kong's second-largest deal this year.

The offer price was at the top-end of the price range, which had been marketed to investors at HK$62.8 to HK$70.58 a share. A listing on the main board is scheduled for Tuesday.

The total amount raised by JD Health ranks behind its parent, JD.com, which raised US$4.5 billion through a secondary listing in June, in what was the biggest fundraising in Hong Kong year to date.

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The completion of JD Health's IPO, together with other recent deals, such as the US$1.8 billion IPO raised by Evergrande Property Services last week, has taken the total amount of funds raised on the Hong Kong bourse to a 10-year high. Excluding JD Health, as of Tuesday, a total of 126 IPOs had raised US$40.9 billion, data from Refinitiv shows.

The health care unit of Chinese e-commerce company JD.com, JD Health has raised US$3.5 billion in Hong Kong's second-biggest IPO this year. Photo: Kyodo alt=The health care unit of Chinese e-commerce company JD.com, JD Health has raised US$3.5 billion in Hong Kong's second-biggest IPO this year. Photo: Kyodo

The strong demand for JD Health's IPO, which put 381.9 million shares on offer, comes amid a sanguine outlook for digital health.

In a recent survey by Bain & Company, conducted among 1,800 consumers and 250 physicians across Asian countries such as China, Indonesia and Australia, nearly half of the respondents said they would adopt digital delivery models, such as telemedicine, and remote care in the next five years.

"Physicians are open to shifting some services to digital or virtual platforms, or to relying on assistance from non-physicians through the use of artificial intelligence or machine learning," Vikram Kapur, who leads Bain's Asia-Pacific health care practice, said in a report.

JD.com owns about 78 per cent of JD Health, which is the biggest online health care platform and retail pharmacy in China by revenue. The platform grossed 10.8 billion yuan (US$1.6 billion) in 2019, according to Frost & Sullivan.

JD Health doctors see patients digitally at the JD.com headquarters in Beijing. Photo: AP alt=JD Health doctors see patients digitally at the JD.com headquarters in Beijing. Photo: AP

Separately, Dada Nexus, the Chinese crowdsourced on-demand delivery and retail platform also backed by JD.com, is seeking new funding in a follow-on share sale that comes less than six months after its US IPO.

It is selling nine million American depositary shares (ADS), it said in a US regulatory filing. Each ADS is equivalent to four ordinary shares. Based on Tuesday's closing price of US$56.41, the company could raise US$508 million. The final price of the share sale is expected on Thursday, according to a person familiar with the deal.

The deal comes amid a rally in Dada Nexus' share price, which on Monday rose to US$57.95, its highest level after having tripled since its June debut. The Nasdaq-listed company raised US$320 million through its IPO.

Goldman Sachs, Bank of America, Jefferies and Haitong International are the joint-underwriters for the deal. JD.com, which owns a 46 per cent stake, has committed to subscribing up to US$50 million worth of the stock sale, according to its filing.

Dada Nexus plans to use the proceeds raised to invest in technology and other marketing purposes.

For the nine-months ended that ended on Monday, its net loss rose 3 per cent to 1.17 billion yuan, from 1.13 billion yuan during the same period a year ago.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.