1. Startups

J&T Express Reportedly Immediate IPO in Hong Kong in the Middle of This Year

It is reported that they are targeting additional fresh funds of between IDR 15,1 trillion-IDR 30,3 trillion from the IPO action

Logistics company J&T Express is reportedly planning to floor or initial public offering (IPO) in Hong Kong in the second quarter of this year. The company plans to target fresh funds of between $1 billion and $2 billion (between IDR 15,1 trillion-IDR 30,3 trillion).

There has been no confirmation given by J&T Express regarding these rumors. The news first blew from a Reuters source last week (17/2).

Source Reuters Those who knew about the news said that actually J&T Express planned to have an IPO last year, but it was postponed due to uncertain market conditions.

If this corporate action is carried out, it is predicted that this IPO will be the largest in Hong Kong in 2023. During 2021-2022, the selling value of IPO shares fell 74% to $7,4 billion in 2022 from $28,17 billion in 2021. The trigger factor, according to Refinitv, due to the global slowdown in capital markets as a result of rising interest rates, high inflation, and ongoing geopolitical tensions.

"J&T Express launched to serve the market e-commerce boom The Southeast Asia is eyeing a $20 billion valuation, achieved in its last private funding round in November 2021," quoting Reuters.

Given that valuation, the company is considering selling 5% to 10% of its shares, which would make the IPO worth between $1 billion-$2 billion, the sources said.

Previously, the company was mentioned to have borne decacorn state in November 2021 after securing funding of $2,5 billion. This funding catapulted company valuation to the $20 billion mark. Investors participating in the round were Boyu Capital, Hillhouse Capital Group, and Sequoia Capital China and other investors from China.

The company itself was actually founded in Indonesia in 2015 by Robin Lee and Jet Lee. Now operating in 13 countries, including Vietnam, Malaysia, Philippines, Thailand, Cambodia, Singapore, China, Saudi Arabia, UAE, Mexico, Brazil and Egypt. The last five countries visited by the company last year.

According to the company's website, in Indonesia alone, the company already has 100 gateway center with professional equipment, more than 4 thousand operating points and 30 thousand trained human resources, and thousands of fleets to support messenger services between cities, between provinces and across islands.

IPO trends in Hong Kong

According to Refinitiv, Hong Kong was the third largest IPO market in the world last year. The city has floored 90 companies, raising HK$104,57 billion. Previously, technology and biotech stocks dominated the IPO list, but were shifted by more traditional industries, such as retail and consumer goods, new materials and services sector.

The city is also getting a boost from its growing profile as a "safe harbor" alternative for the United States that has been a storm for shares of Chinese companies over the past two years. As many as 11 Chinese companies that have IPOs in the United States, did dual listings in Hong Kong. Some of the names are Nio Inc, KE Holdings, Tencent Music, and others.

More Coverage:

Quote from Seeking Alpha, various global accounting institutions put high optimism that the improving global stock market conditions will have a positive effect on IPO enthusiasm in Hong Kong.

A number of incentives from local regulators are prepared as boost, among them "dual tranches, dual counters" which allows trading in Yuan and Hong Kong dollar-denominated securities. This move is expected to attract more dual currency stocks to be listed on the Hong Kong stock exchange.

In addition, it plans to modify listing rules to lower thresholds for five cutting-edge technology industries, including IT, hardware, advanced materials, new energy, and energy conservation and environmental protection. The new rules are targeted to be implemented in the first quarter of this year after the consultation period ends in December 2022.

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