JD.Com fintech unit aims to win Beijing approval for HK IPO as soon as year-end - sources

A man stands outside JD.com’s headquarters, amid the Singles' Day shopping festival, during an organised tour in Beijing, China, November 9, 2021. REUTERS/Tingshu Wang

HONG KONG/SYDNEY, Nov 15 (Reuters) - The fintech arm of Chinese e-commerce firm JD.Com (9618.HK) aims to win Beijing regulators' approval to list in Hong Kong as soon as the end of the year, three people with direct knowledge of the matter said, after a first attempt failed earlier this year.

JD Technology's initial public offering (IPO) would be one of the largest listings of Chinese companies in Hong Kong since a sweeping regulatory crackdown started in China two years ago, as part of which scrutiny of capital raising outside mainland China was tightened.

The revived IPO plan comes as Chinese authorities have in recent months softened their tone on cracking down on tech companies as they seek to boost an economy that has been hurt by the COVID-19 pandemic.

The size of JD Tech's IPO has yet to be decided and could be smaller from its previous $2 billion target as demand for new share sales remains weak globally, one of the people with knowledge of the matter said. If the listing is approved, its timing remains unclear and dependent on market conditions.

There has been about $10.3 billion worth of IPOs and second listings in Hong Kong so far in 2022, just over a quarter of the $37.7 billion of deals done during the same time last year, according to Refinitiv data.

Banks have restarted to work on the float since mid-October, one of the sources said. The people with knowledge of the IPO plans declined to be identified as the information was private.

Reuters reported in May that JD Tech's original plan for a Hong Kong IPO was put on ice because it could not get regulatory approval for the deal to proceed.

JD.Com did not respond to a request for comment.

As a domestically incorporated company, JD Tech - JD.Com's fintech, cloud and artificial intelligence unit - needs approval from the China Securities Regulatory Commission (CSRC) to list offshore, including in the Chinese-controlled territory of Hong Kong.

It first applied to the CSRC in late January seeking an offshore listing, according to the regulator's website.

The CSRC's international department, the main regulator for such offshore listings, has recently been reviewing JD Tech's application again and reached out to other relevant regulators to seek their views on its business, said one of the sources.

The CSRC did not immediately respond to a request for comment.

JD Tech, which was hived off as a separate unit in mid-2017, had appointed several banks to work on the IPO, but progress had slowed as it failed to win regulatory approval first time around, sources have previously told Reuters.

As JD Tech seeks to advance its IPO plan, shareholders of Ant Group's consumer finance unit on Monday said the unit will more than double its registered capital to $2.62 billion - a move which could help the fintech giant move closer to the end of its regulatory-driven revamp. read more

Reporting by Julie Zhu and Kane Wu in Hong Kong and Scott Murdoch in Sydney; Editing by Sumeet Chatterjee and Kenneth Maxwell

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia and Australian M&A. He is based in Sydney.