Sep 22, 2020|

JDD IPO Perspectives: JD Digits by the Numbers


by Vivian Yang

JD Digits filed its IPO papers on the Star market in Shanghai on September 11th. Here is a quick summary of some key figures in its over 400-page prospectus:

The first: JD Digits’ IPO is widely expected to be the biggest digital technology IPO on the Star market. The company adopts a TIE (Technology + Industry + Ecosystem” service model focusing on providing comprehensive digital solutions to businesses. It is the first digital technology provider to join over 4,000 listed companies on China’s A-share market.

RMB 10.327 billion yuan is the revenue JD Digits reported in 1H 2020. In the past three years from 2017 to 2019, its annual revenues were RMB 9.07 billion, RMB 13.616 billion and RMB 18.203 billion respectively, with a compound annual growth rate of 41.6%, a heavy-weight for the one-year-old Star market.

239.05%: Though innovation businesses only account for 5.57% of the total revenues, they grew fast in the past three years with a compound annual growth rate(CAGR) of 239.05%. These emerging businesses mainly target providing digital solutions to city governments and other clients (as opposed to its many merchants and financial institution clients) in the areas of intelligent cities, digital agri-husbandry, digital marketing and more.

Numbers of clients:  Currently JD Digits has 600 financial institution clients including commercial banks, insurance companies, funds, trusts and securities companies. It has served one million small and micro enterprises, 200,000 small and medium-size enterprises and 700 large business centers with its business and technology solutions. In terms of government and other client services, JDD has served more than 40 urban public service organizations with the smart city operating system as its core product. It has a huge IoT marketing platform with over 15 million self-operated and alliance media points, covering more than 300 cities and more than 600 million people.

15.67% is the R&D spending as a percentage of revenue for JD Digits in 1H 2020.This percentage is higher than over 80% of companies listed on the Star market, and makes JDD rank among the top 5% of companies on the A-share market. The company steadily increased its R&D spending, reaching RMB 1.078 billion yuan, RMB 1.743 billion yuan, RMB 2.567 billion yuan respectively in the past three years and RMB 1.619 billion yuan for the first half of 2020 alone.

70%: By June 30th,2020, among JD Digits’ 9,989 employees, 70% are R&D personnel and staff in technology-related positions. The company targets hiring world-class talent, and so far, has gathered over 40 top-notch scientists from all over the world who work focus on AI and exploring the commercial value of technology and its products. More than 100 top technology experts are leading work on industrial-level applications of cutting-edge technologies such as machine learning, deep learning, knowledge graph, computer vision, voice and natural language processing.

72%: 72% of the funds raised during this IPO will be directly used for technology-related projects, especially for the expansion and upgrading of main business, and continuing to build up its R&D strength to stay ahead of the technological curve.

The post-90s generation: talented young people are the absolute main force for JD Digits. The prospectus showed that over 95.5% of JDD’s employees are born after 1980 with 48.7% of them belong to the post-1990 generation.

And many more “firsts”:  The 400-page prospectus listed a number of JD Digits’ business breakthroughs in its seven years of development. Many of the company’s achievements are also industry milestones, including being the first in China to introduce JD IOU (白条), a credit product on the internet; the first to issue consumer finance ABS; the first to create smart asset management technology solution products; the first to adopt blockchain in ABS issuing; the first to develop intelligent city operating system for China’s cities and more.