(Yicai Global) Dec. 1 -- JD.Com, the majority shareholder in Dada Nexus, will buy as much as USD50 million worth of the new shares the on-demand retail and delivery platform plans to issue, according to the Shanghai Securities News.

JD.Com, which merged Dada Nexus with its delivery service platform JDDJ in 2016, said Dada’s performance was positive and it remained bullish on the company’s future development, the report said.

Dada Nexus plans to issue an additional 9 million American depositary shares, based on its latest closing price, the Shanghai-based company said after the US market closed yesterday. That would give it a market value of more than USD500 million.

In pre-market trading today, shares of Dada Nexus [NASDAQ: DADA] were down 6.6 percent at USD54.15 each as of 4.37 a.m. in New York, after yesterday gaining 3.9 percent to USD57.95.

The share sale will be the company’s first follow-on public offering since it listed in June. The underwriters -- Goldman Sachs Asia, BofA Securities, Jefferies LLC and Haitong International Securities -- will have a 30-day option to buy up to a total of 1.35 million additional shares.

The sale is expected to be close to USD600 million, if all rights are exercised. Dada expects to use the net proceeds to carry out marketing initiatives, expand its user base, invest in technology and research and development, as well as for general corporate purposes.

JD.Com has been involved in Dada’s financing twice since becoming its top shareholder, including the initial public offering in June. JD owned about 47.9 percent of Dada before the planned issuance.

Dada’s third-quarter revenue rose 85 percent to CNY1.3 billion (USD197.7 million) from a year ago, its latest earnings report showed. But the firm has not made a profit since being set up in 2014 due to high operating costs. It lost CNY434 million (USD66.1 million) in the three months ended Sept. 30, compared with CNY475 million a year earlier.

Editor: Peter Thomas