Shares in “pre-used” consumer electrics platform AiHuiShou soared by 23% on their Nasdaq debut on Friday, the latest in a string of largely successful IPOs backed by China e-commerce heavyweight JD.com.
AiHuiShou, which is 32% owned by JD, closed at $17.21, after raising $227 million at $14 a share in its offering this month amid investor optimism about growth prospects and consumer spending in China, the world’s second-largest economy. GDP rose by 18% year-on-year in the first quarter amid a continuing recovery from the Covid pandemic.
Investors eyeing stock returns have been shrugging off vitriolic political rhetoric between Washington and Beijing amid sparring on geopolitical issues. Shares in large Internet businesses including Alibaba, however, have been dampened by an anti-monopoly probes in China.
JD.com, which went public on the Nasdaq in 2014 and whose shareholders include Tencent (17%) and Walmart (9%), itself raised $3.9 billion in a secondary offering in Hong Kong a year ago. It followed that with a Hong Kong IPO in December by healthcare arm JD Healthcare, which closed at HK$107.50 on Friday compared with an IPO price of HK$70.58. JD Logistics, a logistics arm, listed in Hong Kong last month at HK$40.36, raising $3.2 billion. It closed at HK$40.16 on Friday.
A better performer was Dada Nexus, a 46%-JD.com owned delivery platform that went public on the Nasdaq in June last year and closed at $30.16 on Friday compared with its IPO price $14. Dada, whose current market cap is $7 billion, is 10% owned by Walmart and 7% owned by funds associated with Sequoia Capital China.
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AiHuiShou, which is also the latest in a recent string of U.S. listings by money-losing Chinese businesses, had red ink of nearly $72 million in 2020, on revenue of $741 million. Besides JD.com, its investors include Shanghai-based 5Y Capital.
JD.com is chaired by Richard Liu, who has a fortune worth $18.3 billion on the Forbes Real-Time Billionaire List today. He was the world’s 77th richest man on the 2021 Forbes Billionaires List published in April. Liu was arrested in Minneapolis in August 2018 for alleged sexual misconduct, but the county attorney did not pursue charges after an investigation. The stock has as much as tripled since that announcement.
China is home to the world’s second-largest number of billionaires after the United States.
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