To The Moon

Following $Alibaba(09988)$ 's all-important announcement earlier this week on its major restructuring to split its business empire into 6 business units, each of which may individually explore IPO, $JD-SW(09618)$  is the next Chinese e-commerce giant in line to disclose its plan yesterday to spin off its property and industrial units in mega deals.

These appear to be auspicious signs of an easing of the 2-year local regulatory crackdown on the technology sector that has seen the fortunes of major technology firms and correspondingly the wealth of their founders more than halved. The stars seem to be lining up to mark the comeback of the technology sector to reignite economic growth post-pandemic.

JD.com announced that it will be listing JD Property and JD Industrials on HKSE upon completion of the spin-off, while it continues to own majority stakes in the spin-offs. Though the sizes of the deals have yet to be finalized, they are expected to raise $1 billion separately in the IPOs. Investors are cheering the prospects of the spin-off, as they chased JD.com's share price up by more than 7% in the Hong Kong bourse.

Like its e-commerce peers, JD.com has been struggling with slowing demands and supply disruptions amidst strict COVID-19 curbs imposed by the local authorities to keep the pandemic at bay. Stiff competition in its overseas ventures from the likes of Shopee owned by $Sea Ltd(SE)$ has also slowed down its e-commerce business in Southeast Asia. Sticky inflation, restrictive interest rates and growing geopolitical tensions are not helping either.

Hopefully the tide is turning now for JD.com as it seeks to regain its dominance and past glory with the Chinese economy re-opening!

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