JD.com’s Hong Kong Stock Exchange IPO

(Georgia Ling)

JD.com’s Upcoming IPO on HK Stock Exchange 

JD.com, Inc is China’s second largest e-commerce company. Often hailed the ‘Amazon of China’ due to the similarities in its supply chain operations, JD.com provides an online marketplace for Chinese consumers to buy a vast range of products, ranging from fresh food to electronics.  

The IPO 

On the 5th June, JD.com announced that they were seeking to raise up to HK$31.4bn ($4.05bn) in their second listing in Hong Kong. They plan on doing so by offering 133 million shares at a maximum price of HK$236 each. The raised funds will be used to improve their supply chain, which is integral to JD.com’s services, as well as further investment in their retail technologies. Potential investment areas could include inventory management and personalised advertising. Notably, due to the nature of JD.com, the COVID-19 pandemic has resulted in increased demand and use of their services. These potential investments could be a response to the increase in JD.com’s operations.  

Richard Liu, CEO and founder of China’s e-commerce company JD.com, raises his hands after the opening bell at the NASDAQ Market Site building at Times Square in New York May 22, 2014. REUTERS/Shannon Stapleton

The context: increasing Sino-US tensions 

The decision of JD.com to list on the Hong Kong stock exchange, as opposed to Nasdaq like their first listing in 2014, is a consequence of wider political changes. Historically, Chinese companies may have preferred to hold IPOs on American stock exchange where they benefit from American capital which fuels their IPOs. However, with increasing Sino-US tensions, Chinese companies on wall street faced increased scrutiny. Nasdaq is currently proposing new compliance rules that could affect the ability of Chinese companies to hold successful IPOs. These increased compliance regulations are a consequence of heightening tensions between American and Chinese companies, particularly with regards to the differing regulatory environments to which these companies operate in. For example, Luckin Coffee (LK) was involved in a scandal whereby some $310million worth of transactions were fabricated when Luckin Coffee went public in the US in May 2019.  

Conversely, the HKEX has strong ties to China, both in geographical and cultural terms. Compared to stock exchanges, such as NASDAQ, HKEX has relatively ‘less stringent corporate governance requirements’ (Ernst & Young, 2019), and is often used by the Chinese government when they want to privatise state-owned enterprises. HKEX is known for its large IPOs. This combination of factors makes HKEX preferable for Chinese companies to list IPOs. 

In addition to increased regulatory requirements on American stock exchanges, US capital markets are less willing to fund Chinese companies due to uncertainty and fears of the impact that the national security legislation soon to me imposed on Hong Kong will have on future Sino-US relations. The USA has already revoked Hong Kong’s special trade status, that considers Hong Kong autonomous from mainland China, and there is scope for future hostilities between China and the USA, as the ‘phase one’ deal, aimed to de-escalate the trade war now under threat.  

National security law 

  • Hong Kong and China have a special relationship. Since Britain returned Hong Kong to China in 1997, Hong Kong and China have operated under the ‘one country, two systems’ principle, and Hong Kong has a mini-constitution, called the Basic Law.  
  • As a consequence, Hong Kong has enjoyed freedoms that are not permitted in mainland China: freedom of assembly, speech and some democratic freedoms. These freedoms have been integral to Hong Kong’s prosperity.  
  • Hong Kong’s proximity to China, combined with these democratic liberties, means that Hong Kong serves as an ideal location for those companies looking to set up and expand within the east.  
  • However, this position is under threat, as in late-May, China announced plans to impose a national security law on Hong Kong.  
  • This law is aimed at stopping the pro-democracy protests that occurred throughout the autumn and winter of 2019. If this law is implemented, it would result in any acts that endanger China’s national security being banned. It would also allow ‘national security agencies’, which potentially include Chinese security forces, to operate in Hong Kong.  



The largest US electronics stock market (when measured in terms of shares traded). It has a high number of listings, and initially had a reputation as a growth-company exchange.  





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