(Yicai) Oct. 17 -- Tencent-backed courier startup J&T Global Express has started offering equity to investors in a downgraded HKD3.53 billion (USD451.2 million) initial public offering that is still expected to become the second-largest in Hong Kong this year.

J&T [HK: 1519] aims to raise HKD3.53 billion (USD451.2 million) by offering 326.6 million shares via the listing on the Main Board of the Hong Kong Stock Exchange that continues till Oct. 19, the Shanghai-headquartered firm announced yesterday. J&T's shares are expected to begin trading on Oct. 27. A tenth of the total will be offered in Hong Kong and the remainder Internationally. The issue price is HKD12 (USD1.50) per share.

Former executives of Chinese phonemaker Oppo founded the delivery firm in Indonesia in August 2015. The company that serves e-commerce companies with warehousing and freight forwarding services bought Alibaba-backed Best's express delivery business in China in 2021 and has since widened its regional expansion. The firm is active in 13 nations, including some in Latin America and the Middle East.

The listing is predicted to be the second-largest on the HKEX this year since Chinese baijiu maker ZJLD Group went public in April, raising USD675.2 million. But the sum is more modest than expected as Securities Times reported in June that J&T aims to garner from USD500 million to USD1 billion in funds via the IPO so the updated target is even lower than the bottom of the earlier range.

J&T has nine cornerstone investors which are also its existing shareholders, including SF Holding, Temasek Holdings, Tencent Holdings, and Hillhouse Capital Group. They subscribed to USD199.5 million of shares. Shenzhen-based WeChat operator Tencent is the biggest shareholder as it has a 6.3 percent stake in J&T while the number for express courier SF is 3.1 percent.

J&T turned around to record gains last year, earning around USD1.6 billion in net profit. Its gross profit margin rose to negative 16.2 percent from negative 120.4 percent in 2020.

Editor: Emmi Laine