Chinese e-commerce giant JD.com (JD) is planning a secondary listing in Hong Kong within the coming months- and has already confidentially made an application for the listing, Reuters reports.
According to Reuters’ sources, JD.com is hoping to raise as much as $3 billion from the listing, which could take place as soon as June. If the move goes ahead, this would mark the largest equity capital market transaction in Hong Kong so far this year.
Despite Covid-19, JD.com has seen its US-Nasdaq-listed shares surge 24% year-to-date, giving the company a $64 billion market valuation. Indeed, the stock currently shows a bullish Strong Buy consensus from the Street with a $50 average analyst price target (15% upside potential). (See JD stock analysis on TipRanks).
Notably, both Morgan Stanley and Bernstein have upgraded JD from hold to buy recently. Bernstein analyst David Dai also boosted his price target from $41 to $52, arguing that JD’s EPS can double in the next three years.
The analyst explains “JD is a 100% China play. In the worst period of COVID-19 in China, JD outperformed peers. Now while the rest of the world is experiencing what China had 2 months ago, things in China are already turning the other direction.”
As a result, he raised JD’s estimated revenue growth to 18% this year and 20% next year, and net margin to expand to 2.4% by 2021.
In November 2019, Chinese tech giant Alibaba (BABA) made headlines with its own massive $13 billion Hong Kong secondary listing- the city’s third largest fundraising deal to date.
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