JD.Com’s Logistics Arm Sees First-Quarter Profit Dive Ahead of Hong Kong IPO
Lu Hanzhi
DATE:  May 14 2021
/ SOURCE:  Yicai
JD.Com’s Logistics Arm Sees First-Quarter Profit Dive Ahead of Hong Kong IPO JD.Com’s Logistics Arm Sees First-Quarter Profit Dive Ahead of Hong Kong IPO

(Yicai Global) May 14 -- JD Logistics, which is getting ready to list in Hong Kong later this month, posted a 72.7 percent plunge in gross profit for the first quarter from the same period last year as the logistics arm of Chinese e-commerce giant JD.com aggressively expands its logistics network and upgrades infrastructure.

The company logged profit of CNY230 million (USD35.7 million) in the three months ended March 31, according to the firm’s updated earnings report released yesterday. Revenue, though, jumped 64.1 percent to CNY22.4 billion (CNY3.5 billion).

JD Logistics has been increasing warehouse space, expanding its delivery routes, improving infrastructure and has hiked the number of employees by 52 percent in the last year to 260,000 staff as of March 31, it said.

The company expects losses to climb further this year, JD Logistics said. This is mainly due to movements in the fair value of convertible redeemable preferred shares, a lower gross profit margin as well as big jumps in general and administrative expenses, sales and marketing costs as well as research and development expenses.

The Beijing-based firm is eyeing a valuation of USD35 billion from its upcoming initial public offering on the Hong Kong bourse on May 28, according to Tencent News.

The funds will be used to continue to upgrade its logistics networks, to develop advanced technologies, such as automation technology, data analysis and algorithms, as well as to expand the breadth and depth of its integrated supply chain solutions, the logistics company said earlier.

Editor: Kim Taylor

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Keywords:   JD Logistics,HK,IPO