Baba Stock – Alibaba-Backed Huitongda Plans Hong Kong IPO
By Ben Otto
Huitongda Network Co. is planning an initial public offering in Hong Kong, the latest Chinese logistics-services company seeking to test investor appetite in the Asian financial center.
Nanjing-based Huitongda, which specializes in selling goods and supply-chain services in China’s rural areas, intends to use proceeds from an offering to expand its consumer base and invest in IT infrastructure, it said in a draft prospectus filed to the Hong Kong exchange Friday.
It didn’t specify a timeline for the offering nor say how much in plans to raise.
Huitongda’s pre-IPO investors include Chinese tech titan Alibaba Group Holding Ltd., which holds a 19% stake. Alibaba invested 4.5 billion yuan ($697.8 million) in the company in 2018 as part of efforts to boost its reach into rural China.
Huitongda’s public-offering plan comes as online sales rise in China amid the pandemic and follows moves by other Chinese logistics specialists to seek listings in Hong Kong.
In May, JD Logistics Inc., a spinoff from e-commerce giant JD.com Inc., raised more than $3 billion in an offering, while SF Real Estate Investment Trust raised about $334 million in what was the financial hub’s first-ever logistics REIT IPO. JD Logistics shares are trading about 4% above their IPO pricing, while SF REIT shares have traded well below.
Huitongda has expanded in recent years from selling merchandise such as household appliances to offering agricultural means of production and homebuilding materials, among others. It also provides rural retail stores with services to operate online businesses and ensure stable supply chains, with operations reaching more than 19,000 towns and villages in 21 provinces.
Huitongda was China’s largest commerce platform serving retail businesses in the lower-tier market in 2020 by transaction value, it said in its filing, citing a report by Frost & Sullivan. It posted a loss of CNY280.0 million in 2020 on revenue of CNY49.63 billion.
Citigroup and China International Capital Corp. are among the advisers for the offering.
Write to Ben Otto at [email protected] Zoom.com