Jingdong Applies For Exemption From Jingdong Logistics Or First Listing.

In the first quarter earnings call conference, Zhou Shaoning, chairman of the company, made the first public response to the "business spin off" - actively assessing the progress of business divestiture and business review. This shows that the spin off business has been on the agenda, and Jingdong logistics may also be plotting it.

Today, Jingdong group formally passed the hearing of the Hong Kong stock exchange. The Jingdong said in its prospectus that it had applied for exemption from the HKEx so that it could split up a subsidiary entity in three years and be listed on the Hongkong stock exchange.

However, Jingdong stressed that up to now, the company has not yet had any time or specific plans for the potential splitting of the HKEx. However, the company will continue to explore the continuous financing needs of different businesses and may consider splitting one or more related businesses into the Hongkong stock exchange in the next three years.

It is understood that Jingdong has four unicorns, Jingdong logistics, Jingdong number, Jingdong health and industrial products. At present, Jingdong logistics is likely to be the first best target for its spin off.

First of all, as early as 2017, Jingdong divided Jingdong logistics into an independent business department and provided its services to third party companies. The next year, Jingdong logistics completed the first round of $2 billion 500 million financing, valued at $13 billion 500 million.

Secondly, Jingdong logistics shows strong driving force for development. Since 2019, Jingdong logistics has experienced a series of measures such as the pay adjustment of express staff and the opening up to the outside world. The loss situation of Jingdong logistics has begun to change, and the external revenue has been increasing rapidly.

At the Jingdong logistics 2020 meeting, CEO Wang Zhenhui said that the external revenue of Jingdong logistics has exceeded 40% of the total revenue. The estimated turnover of Jingdong logistics in 2019 is about 58 billion 700 million yuan.

Moreover, in the case of a sharp drop in the volume of retail sales due to the outbreak of the epidemic, Jingdong's revenue in the first quarter of this year has grown against the trend. According to Beijing Eastern first quarter financial report, Jingdong logistics and other services revenue was 6 billion 585 million 256 thousand yuan, an increase of 53.64% over the same period last year.

Visible Jingdong logistics has broad prospects for development, Jingdong is one of the advantages of business. If listed, investors in the capital market are more likely to recognize it. In addition, it is noteworthy that, as early as the end of 2019, foreign media reported that the Logistics Department of Jingdong had already discussed with some banks about potential overseas IPO, which may be listed in Hongkong or New York. In this regard, the Jingdong did not explicitly deny that it merely replied to the four words "no comment".

In fact, if Jingdong logistics can be listed independently, the two tier capital market will become an effective channel for financing, which can alleviate the current situation of lack of money. As we all know, Jingdong logistics is a heavy capital investment, buying land to build warehouse, purchase vehicle equipment, and use its own logistics staff, resulting in heavy cost burden.

According to the management of the company in April 2019, the Jingdong lost 2 billion 300 million yuan in 2018 (if the total amount of the internal settlement was deducted, the total loss was more than 2 billion 800 million), and it had been losing 12 consecutive years. "If we lose so much, Jingdong will only have enough money to finance two years."

In 2019, though it was a year of radical reform of Jingdong logistics, it only improved the deficit. At the same time, Jingdong logistics is also continuing to promote technology logistics, talent expansion and other matters, which require a large amount of capital investment. In April of this year, the Jingdong also sought news of $2 billion 910 million in financing.

It can be seen that listing or Jingdong logistics is the best way to change the status quo. Is Jingdong logistics the right reason for applying for exemption? The media will continue to pay attention.