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Running IPO, JD.com organized a group to make money



2020 is a bumper year for JD.com. In early June, Dada went public in the US, and JD.com, which was listed on the US stock market in the same month, went to Hong Kong for a second listing. On September 11, the Shanghai Stock Exchange formally accepted JD Digital’s IPO application on the Sci-tech Innovation Board. On the evening of September 21, JD.com issued an announcement stating that JD Health, a subsidiary of the company, officially launched its listing in Hong Kong.

Running IPO, JD.com organized a group to make money 1

Following JD.com and Dada, JD.com and JD.com Health have confirmed that they are preparing for listing, and JD.com Logistics and JD.com Industrial Products have also announced listing news. According to statistics, after the second listing of Hong Kong stocks in June, Jingdong Group had a total market capitalization of 725 billion on the opening day, and a net fund raised of 29.8 billion Hong Kong dollars, setting a record for the public offering of Hong Kong stocks this year. The total market value on that day exceeded 700 billion Hong Kong dollars, ranking it among the domestic Internet. The company’s market capitalization ranks fourth. As of September 24, the total market value has risen to 895.762 billion Hong Kong dollars, and the remaining subsidiaries have raised nearly 100 billion yuan. The overall valuation of JD.com is over 1 trillion.

For several young subsidiaries, the IPO process can be described as running forward. In 2013, Jingdong Digital was operated independently. In 2017, Jingdong officially established Jingdong Industrial Products. In the same year, Jingdong Logistics operated independently. In 2019, JD Health announced its independent operation. The shortest subsidiary has only been in operation for more than a year, and the longest is only 7 years.

From its embryonic shape to the trillion-dollar JD system, the JD system has risen due to capital intervention in just one year.

The layout of the Jingdong department

What kind of game is Jingdong doing?

Among these companies, Dada was the first listed company to be raised by JD.com, followed by JD Logistics and JD Digital. The JD system created by Liu Qiangdong is advancing collectively to the capital market. The scale of JD.com has gradually grown, unicorns have become listed companies, and JD.com’s multiple carriages have gone hand in hand.

On January 23, 2019, JD.com announced that it will adjust its structure and officially upgrade JD.com Mall to JD Retail, keeping pace with JD Logistics and JD Digital. In May of the same year, JD Health received over 1 billion U.S. dollars in Series A financing, becoming the third unicorn company following JD Digital Technology and JD Logistics.

This is the first time Jingdong has made its business layout clear and concise.

If JD retail is the first main line of JD Group, then JD Logistics, JD Health, and JD Digital are the second main line of JD Group based on JD’s retail layout.

All the business of the JD Group is developed around JD retail, which is naturally the first main line. JD Logistics was in 2007 when JD found that 72% of the complaints from end retail customers were related to logistics. In order to better serve customers, JD decided to establish its own logistics system. At present, JD Logistics is already the most competitive subsidiary of JD.com in the industry, and it is also the moat of JD retail.

According to JD’s financial report, JD’s overall revenue for the quarter reached 134.8 billion yuan, a year-on-year increase of 28.7%. Among them, the net income of e-commerce platforms was 118.85 billion yuan, a year-on-year increase of 27%. Net service revenue was 16 billion yuan, a year-on-year increase of 47%. It is worth noting that, among service revenues, logistics and other service revenues increased by 94% year-on-year, with revenue reaching 6 billion yuan.

Compared with the rookie system, which is characterized by low prices, the four links and one reach, and SF Express, which is firmly established in the high-end express market. JD Logistics has always been the third force in the express industry, and it is also a force that cannot be ignored. The combination of JD Logistics + Dada Group maximizes the characteristics of fast timeliness.

At the same time, in order to better serve JD’s retail business and help upstream suppliers and terminal retail customers obtain loans to enhance user experience, JD’s financial business has been launched, and JD’s Baitiao and JD’s Baitiao have been launched, and then officially renamed JD Digital.

The benchmark Ant Group of JD Digital. Not long ago, it also disclosed the IPO prospectus on the Science and Technology Innovation Board, which will be reviewed at the meeting on September 18. The revenue of Ant Group from 2017 to 2019 was 65.4 billion yuan, 85.7 billion yuan, and 120.6 billion yuan. In the first half of 2020, it was 72.5 billion yuan. According to the prospectus of JD Digital, from 2017 to 2019, the company’s revenue was 9.1 billion yuan, 13.6 billion yuan, and 18.2 billion yuan, respectively. It was 10.3 billion yuan in the first half of 2020.

From this point of view, the contest between JD Digital and Ant Group does not seem to be of the same magnitude and has not yet achieved break-even.

Running IPO, JD.com organized a group to make money 2

It is worth noting that 30% of Jingdong Digital’s revenue relies on the Jingdong platform. Over-reliance on the JD platform makes JD Digital’s ability to self-hematopoise slightly weak. Against the background of frequent risk events at JD Digital, there is still a long way to go.

In 2011, JD.com entered the field of pharmaceutical e-commerce because pharmaceutical retail is an important part of customer needs. Combined with the closed loop formed by JD’s self-built logistics system, it can also bring a stable customer experience to terminal retail customers.

In 2019, JD Health announced its independent operation. In August 2020, JD Health announced that it had obtained Hillhouse Capital’s US$830 million in Series B financing. The post-investment valuation was as high as US$30 billion at that time. It is expected to be listed in Hong Kong this year. With the blessing of the JD system, after JD Health becomes independent, it can also obtain various resources of the JD Group in logistics and supply chain.

In 2019, JD Health said to the outside that its revenue exceeded 10 billion and it was in a profitable stage. This performance is a good transcript compared to several major players in the industry.

The transcript is good, but there are too many top players in this field. In the past, BAT large factories deployed in the medical and health field, and later, well-known Internet companies such as Ping An Good Doctor and Dingxiang Doctor entered the game. In the field of medical and health where the strong are like clouds, JD Health has a long way to go. Compared with Alibaba Health, which has been listed for a long time, JD Health did not complete the latest round of financing until May last year, and then announced the separation and independence.

Compared with Ali Health, which has already been listed, JD Health is a latecomer, but Ali Health only made a profit in 2018, and JD Health was already profitable before it went public. It is not an exaggeration to say that JD Health is a “rising star”.

However, in the face of “raging” competition, JD.com Health currently only has the best medical e-commerce business, which cannot be taken lightly.

With the expansion of the industrial product e-commerce market, JD.com has also begun to make efforts on the industrial Internet. It announced its industrial product strategy for the first time in March 2019.

Jingdong Industrial Products is the layout of the Beijing Department in corporate business.

JD’s industrial products business is one of the five corporate business strategies released at the beginning of 2019, and it has become the first landing plan in the industrial product field. Song Chunzheng, vice president of JD.com, once said that the pain points of the industrial product procurement industry, such as low supply chain efficiency and difficult management, call for integrated service providers to join. JD.com has experience, technology and resource advantages in the field of corporate market services, and is capable of providing such services for the corporate supply chain management system.

Since the beginning of this year, the development of JD Industrial Products has accelerated. JD.com announced that its subsidiary JD Industrial Products has signed a US$230 million Series A financing agreement. The investment is led by GGV Jiyuan Capital. After the investment, the valuation has exceeded 2 billion US dollars.

The second main line of JD Logistics, JD Digital, and JD Health are all aimed at consolidating JD’s retail business. Dada played a role in assisting JD Logistics’ business in the field of intra-city distribution.

At present, it has not only realized the market value of 100 billion U.S. dollars of JD Retail, but also successfully realized the transition from a single business to a multi-dimensional business and formed a closed loop. The second main line of JD Logistics, JD Digital, and JD Health have all achieved a valuation of more than 200 billion yuan.

Faced with profit dilemmas and industry competition, the listing of JD.com is not difficult to understand as a stock of ammunition. JD’s ambitions are obvious.

What is the purpose of the split listing?

JD is forming a diversified development strategy based on e-commerce. Over the years, JD.com has focused on e-commerce business and has formed a relatively complete market system, with JD.com as the mainstay, and each segmented industry sector complements and cooperates.

JD.com’s split of the listed sectors is actually conducive to its own market and business development. JD Digital serves the payment transactions of JD Mall, JD Logistics has undertaken JD’s logistics needs, and JD Health is a vertical track. In 2020, when the big health industry is getting attention, at this time, splitting and listing can maximize the market. Recognition.

In fact, every new business of JD.com will inevitably need the support of other business groups to make a difference. Take JD Health as an example. The supply chain of JD Logistics ensures the efficiency of JD Health’s drug delivery. JD Digital’s big data technology has enabled JD Health’s online consultation platform to be successfully established.

Running IPO, JD.com organized a group to make money 3

Spin-off and listing is an important way for the capital market to optimize the allocation of resources. It will help listed companies and their subsidiaries to further achieve business focus, improve their operating capabilities, and also help increase the valuation of parent companies and subsidiaries. It coincides with the IPO boom and capital intensive. For Jingdong at this time, it is a good time to improve the stability of its subsidiaries.

After all, JD’s subsidiaries are not considered top players in the industry, and JD’s growth is accompanied by the market’s questioning of its “burning money” model.

Investing huge sums of money to build logistics and aggressively fighting the “price war”… This also caused Liu Qiangdong to encounter the crisis of breaking the capital chain many times during his entrepreneurial process, and he had to introduce external investors like Today Capital and Hillhouse Capital. To join.

Investing huge sums of money to build logistics and aggressively fighting a “price war”… This also caused Liu Qiangdong to encounter the crisis of breaking the capital chain many times during his entrepreneurial process, and had to introduce external investors like Today Capital and Hillhouse Capital. To join. Today’s Capital Xu Xin once said that at that time, Liu Qiangdong almost lost his face overnight. After this year, Liu Qiangdong’s awareness of capital crisis has been maintained, not only splitting the subsidiaries to operate independently, but also investing in external companies. As of August 31, 2020, JD.com has invested a total of 295 companies abroad, only Alibaba and Tencent.

The spin-off and listing of the various businesses of JD.com will release tremendous value. On the one hand, the addition of a new financing platform, on the other hand, is also conducive to the increase of Jingdong’s stock price. As of September 22, Jingdong’s stock price has soared by 108% so far this year. In the future when Jingdong faces a financial crisis, these companies that are split and listed will undoubtedly become Liu Qiangdong’s trump card and confidence.

Why this year?

This year JD.com has made frequent moves in the capital market. Information on many levels shows that JD’s darkest moment has passed and it is getting better and better. At this time, the spin-off and listing of subsidiaries will help strengthen the JD Matrix’s ability to resist risks and attract other capital.

2019 is the first year since JD.com’s US stocks went public, and its core performance exceeded expectations. Net revenue for the year increased by 25% year-on-year to 576.9 billion yuan, and net profit exceeded expectations by approximately 12.2 billion yuan. According to the second quarter financial report of JD.com in 2020, JD.com’s revenue exceeded 200 billion yuan, the highest value in ten quarters.

JD.com, which has bottomed out, seems to usher in a turning point in 2020.

The growth in performance has added confidence to the IPO of “Jingdong” companies. By then, Liu Qiangdong will have a bumper harvest, and his layout many years ago will be verified by time.

In recent years, the “three links and one access” have been listed together, and SF Express, which once insisted that it “resolutely not be listed”, has also successfully landed in the domestic A-share market. Against the backdrop of a blowout in the express delivery industry and the high valuation of Cainiao.com, it is not surprising that the “three links and one delivery” and SF Express are looking for a capital market listing.

Faced with the upsurge of listing logistics companies, Jingdong felt a lot of pressure.

In August 2019, after more than ten consecutive years of losses, JD Logistics finally achieved a breakeven. From e-commerce logistics to open supply chain service companies, JD Logistics finally ushered in a harvest period in 2020 after the pains of transformation. At this time, listing will not only make further profits, but also help JD Logistics get a share of external orders.

At the same time, under the impact of public health incidents this year, in 2020, the Internet medical market will reach 200 billion yuan, with a market growth of 46.7%. JD Health, which is on the “golden track”, undoubtedly caught up with the good time. JD Health’s listing on the one hand proves that JD’s system attaches great importance to this business, and more importantly, the independent listing can also help JD.com resist more risks.

In 2020, within a week of the opening of the Science and Technology Innovation Board, many high-tech companies have the possibility to go public. Sci-tech innovation board companies are full of vitality and eager to try, and JD Digital is one of them.

After Ant Group announced its upcoming IPO, JD Digits submitted an application for listing on the Science and Technology Innovation Board. This Internet finance platform incubated by JD.com has a latest valuation of up to 200 billion yuan.

Judging from the first few batches of acceptance lists for the Sci-tech version disclosed by the Shanghai Stock Exchange, the Sci-tech version is more inclined to companies with “hard technology” genes, and “financial technology” has not yet become the lucky one. In 2018, “JD Finance” was renamed “JD Digital” to emphasize its technological positioning.

In the 2020 Hurun Global Unicorn List released in August, the top three unicorn companies in China’s financial technology industry are: Ant Group, Lufax, and JD Digital, ranking first in the global rankings. , 4th and 12th.

After the strong “de-financialization”, JD Digital strives to label “technology”, gradually transforming from a digital financial model to a digital technology model, and will compete with Ant Group in the secondary market after listing.

JD’s subsidiaries have capitalized and independently listed, which may be an important starting point for JD.com. If it can be successfully listed this year, JD will get a lot of capital injection.

How to get rid of dependence on JD.com, improve the independence of the company, and reverse the situation of losses are also issues that JD.com companies face when they go public. JD.com needs to make more control and adjustments in development strategies and tactics.