Chinese tech giant’s health care unit, JD Health International, has raised USD 3.5 billion ahead of its market debut on December 8. Following the eleventh hour suspension of Ant Group’s listing on Hong Kong and Shanghai markets, JD Health is all set to become the year’s largest initial public offering (IPO) in the city and Asia’s largest health-care IPO thus far. 

• JD Health is a digital healthcare service provider based in China, providing online health consultations with doctors and pharmaceutical products to wholesale and retail customers.

• The company witnessed a 76% annual growth in revenue, earning USD 1.3 billion in the first half of 2020. Its healthy financials helped increase investor optimism around the company after its IPO announcement.

More details:

• Initially marketed to potential investors between HKD 62.8 – HKD 70.58 per share, JD Health’s stocks will be priced at HKD 70.58 (USD 9.1) per share, with an expected valuation of USD 29 billion.

• A combined USD 1.35 billion will be put forward by six cornerstone investors including reputed firms such as BlackRock and Singapore’s GIC, signalling a positive outlook for the digital healthcare market.

• This offering is set to supplant Japan’s Otsuka Holding Co’s USD 2.3 billion listing as Asia’s biggest IPO in the healthcare industry. A surge in investor demand in this sector is predicted to be a result of the ongoing pandemic.

The bigger picture:

Analysts predict that the funds brought into Hong Kong in anticipation of Ant’s blockbuster listing have. not left the city, as investors are simply looking for quality investment opportunities.

• Including JD Health’s float, the city’s primary IPO listings have totalled to USD 25 billion in 2020, according to data reported by Reuters.

• The stellar performance of JD Health among other listings has paved the way for Hong Kong to record a ten-year market high.

• However, the high valuation for JD Health shares has resulted in a boost in Alibaba Health Information Technology stock performance. Small-time investors had reportedly opted for the cheaper shares sold by JD Health’s rival while the company’s IPO preparations were underway.

• had a dismal performance in the market this week, rallying by 1.2% today.

• Alibaba Health enjoyed a steady performance over the week, rising by 1.33%.

Looking ahead:

• Mainland detergent maker, Blue Moon has been recently granted approval for an offering, as it aims to raise USD 1 billion by the end of the year.

Two more IPOs are set to be listed in the Hong Kong market in upcoming weeks.

• Evergrande Property Services is hoping to raise USD 3 billion whilst China Resources Mixc Lifestyle is targeting to raise up to USD 1.58 billion.

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