According to official data, JD.com's industrial business has served more than 8,000 large enterprise customers, including nearly 40% of the Fortune Global 500 and nearly 50% of China's top 500 companies. It covers more than 100,000 industrial manufacturing-related facilities, including automobiles, machinery and equipment, and electronic product assembly, and has participated in more than 16,000 engineering and construction projects.
On March 30, JD.com (Nasdaq: JD, 09618.HK) issued two consecutive announcements stating its plan to spin off JD Property and JD Industrial for independent listing on the Hong Kong Stock Exchange. According to the announcement, the proposed demerger will involve a global offer of JD Property and JD Industrial shares. After the proposed demerger, JD will continue to indirectly hold more than 50% of the shares of JD Property and JD Industrial, and the two companies will remain subsidiaries of JD. The details of the proposed demerger have not yet been finalized.
According to announcements and public information, JD Property is the asset operation and management organization of JD Logistics REIT and the sole warehouse and logistics facility development and operation management subgroup under JD.com. It holds all of JD.com's self-developed warehouse and logistics facility projects. JD Property was registered in January 2012, and as of March 30, JD.com held approximately 74.96% of the issued shares of JD Property through its wholly-owned subsidiary.
JD Industrial is JD.com's industrial supply chain technology and service provider, helping customers to secure supply, reduce costs and improve efficiency through digitalization. JD Industrial was registered in the Cayman Islands on November 5, 2019. As of March 30, JD.com, through its wholly-owned subsidiary, held approximately 77.95% of the issued shares of JD Industrial.
Regarding the rationale for the spin-off, the announcement stated that the spin-off will enable investors to better evaluate the company, focus on JD.com's business, and increase the value of JD Property and JD Industrial, thereby benefiting JD and its shareholders as one of the controlling shareholders. It will also help the divested subsidiaries to independently enter the equity and debt capital markets, enhance their ability to obtain bank loans and financing, and directly link management responsibilities to their operational performance, thereby improving decision-making procedures, accelerating response times to market changes, and enhancing operational efficiency.
"JD Property's business will attract investors focused on high-growth opportunities in infrastructure asset management and integrated real estate services, while JD Industrial's business will attract investors focused on high-growth opportunities in industrial supply chain technology and services. As JD Industrial is an independent listed company, JD can fully focus and allocate its financial resources to the development of JD's business without considering the financing needs of JD Industrial," the announcement said.
Possibly influenced by the news, JD's U.S. stock opened higher, up 6.22% to USD 43.73 at the time of writing, while its Hong Kong stock closed at HKD 163.2, up 2.58%.
It is worth noting that on March 28, Alibaba Group Chairman and CEO Zhang Yong announced the construction of a "1+6+N" organizational structure, which includes the establishment of six business groups, including Alibaba Cloud Intelligence, Taobao and Tmall Commerce, Local Services, International Digital Commerce, Cainiao, and Alibaba Digital Media and Entertainment, under Alibaba Group. This means that each business group will be able to face the market independently and more agilely, and in the future, business groups and companies that meet the requirements will have the possibility of independent financing and listing.