How could J&T Express IPO worth HK$100 billion?
$J&T EXPRESS-W(01519)$ finally goes public, and it took just over three months from application to approval.
IPO and Valuation
On October 16th, J&T Express(极兔) released its prospectus, planning to globally issue approximately 326.6 million shares, including a 15% over-allotment option. The offering period is from October 16th to October 19th, with a sale price of HKD 12.00 per share, traded in units of 200 shares per lot. $Morgan Stanley(MS)$ $Bank of America(BAC)$ $China International Capital Corporation(03908)$ are the joint sponsors, with an expected listing on the Hong Kong Stock Exchange Main Board on October 27th.
Regarding cornerstone investors, they have subscribed or committed to subscribing for an aggregate amount of approximately USD 199.5 million (about HKD 1.563 billion) at the offering price, accounting for 40% of the total offering. Sequoia Capital, Temasek, $Tencent(00700)$ , Hillhouse, and $S.F.Holding Co.,Ltd.(002352)$ are among them.
At this pricing level, Jituhu's IPO market capitalization reaches HKD 105.7 billion, with proceeds of HKD 3.9 billion. This valuation represents a multiple of about 9 times its 2022 profit, although most of the 2022 profit was achieved through fair value changes, and the actual operational result was a loss.
Due to this pricing, there may be differing opinions among investors. Therefore, significant fluctuations may occur in the early post-IPO trading. Furthermore, with the fundraising of HKD 3.9 billion being less than 4% of the HKD 105.7 billion market capitalization, the issuance proportion is minimal.
Why is J&T Express growing so fast?
The company was established in Jakarta, the capital of Indonesia, in 2015, by Li Jie, the former head of OPPO Indonesia. Within just three years of entering the Chinese market, and with the thriving of emerging e-commerce platforms like Douyin (TikTok) and Kuaishou (Kwai) $KUAISHOU-W(01024)$ , J&T achieved a daily order volume of over 20 million in just a year and a half. Compared to its domestic peers like Shunfeng and Tongda, Jitu's journey from establishment to going public can be described as lightning speed.
In September 2021, J&T Express acquired the Chinese courier business of Best Inc. for approximately 6.8 billion RMB (approximately 1.1 billion USD). In May 2023, J&T also acquired Fengwang Information, a subsidiary of Shunfeng, for 1.18 billion RMB, gaining more courier network resources.
In Southeast Asia, J&T Express provides courier solutions to leading e-commerce platforms. Based on the parcel volume in 2022, Jitu Express is the top courier operator in Southeast Asia with a market share of 22.5%. The company helps e-commerce platforms reach areas where traditional logistics service providers are lacking. This includes leading e-commerce platforms such as Shopee $Sea Ltd(SE)$ , Lazada $Alibaba(BABA)$ , Tokopedia, Taobao, Tmall, Shein, Noon, as well as merchants and consumers on short video and live streaming platforms like TikTok, Douyin, and Kuaishou.
In terms of financial performance, from 2020 to 2022, Jitu Express achieved revenues of $1.525 billion, $4.852 billion, and $7.267 billion, with corresponding annual profits (or losses) of -$664 million, -$6.192 billion, and $1.573 billion.
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- Brando741319·2023-10-16GoodLikeReport