JD Logistics Prospectus: Robust Steady Growth and Continuous Investment in Technology

JD Logistics Prospectus: Robust Steady Growth and Continuous Investment in Technology

by Yuchuan Wang

On Feb. 16, JD Logistics (JDL), China’s leading technology-driven supply chain solutions and logistics services provider, officially filed its IPO prospectus with Hong Kong Stock Exchange (HKEx).

According to the prospectus, despite the impact of the COVID-19 outbreak, JD Logistics’ revenue increased by 43.2% from RMB 34.6 billion yuan for the nine months ended Sep. 30, 2019 to RMB 49.5 billion yuan for the nine months ended Sep. 30, 2020. As of Sep. 2020, the company had cash and cash equivalents of RMB 9.8 billion yuan.

Started as the internal logistics arm of JD.com in 2007, JD Logistics has created one of the best experiences for over 400 million JD customers and improved the efficiency of its clients’ supply chain management. Since 2012, JD Logistics has helped JD.com maintain its inventory turnover consistently below 40 days, despite millions of SKUs (stock-keeping-units), and reduce its fulfillment expense ratio from 7.2% in 2016 to an industry-leading 6.5% in the nine months ending Sep. 30, 2020.

In 2017, JD Logistics began to open up its solutions and services. Since then, the company has seen revenue contribution from external customers as a percentage of total revenue increase from 29.9% in 2018 to 38.4% in 2019, and further increase to 43.4% in the nine months ended Sep. 30, 2020.

Technology is at the core of JD Logistics’ development, allowing the company to attract new customers as well as to further penetrate existing customers. As of Dec. 31, 2020, JD Logistics is entitled to over 4,400 patents and computer software copyrights (including applications thereof), of which over 2,500 relate to automation and unmanned technologies.

Housing a logistics network which covers nearly all of the population in China, JD Logistics currently has over 250,000 employees, operates over 800 warehouses, and serves over 190,000 business clients.

JD Logistics plans to use the fund raised to invest in the expansion and upgrade of its logistics networks, and develop advanced technologies to be used in supply chain solutions and logistics services including the research of fundamental technologies such as 5G, cloud computing, IoT and more to drive long-term service innovation.

Click here to read the prospectus filed with HKEx.

 

(yuchuan.wang@jd.com)

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