With the net proceeds from the initial public offering (IPO) of about HK$26.5 billion, JD Health issued about 281.9 million shares priced at HK$70.58 each but the stock commenced at HK$94.5 at the market open, rising 34%.
The market value exceeded HK$300 billion, surpassing that of Ali Health. Shares hit an intra-day high to HK$109.5, up 55% from the offer price.
The heath-care unit of JD has six cornerstone investors, including Singapore Government Investment Corporation (GIC Pte), Hillhouse Capital and BlackRock, which together subscribed for $1.35 billion in stocks.
BofA Securities, UBS and Haitong Securities are the underwriters for the deal.
The company said that 40% of the net proceeds will be used for business expansion over next three to five years, 30% for research and development in the following two to three years, and the rest for potential investments, mergers and corporate operations.
Although owning up to 72.5 million annual users in 2019 and offering medical help to customers from over 65,000 medical experts and doctors, the platform has been experiencing loss in revenue, representing an $820 million revenue loss for the past six months ended this June.
JD Health’s debut marks a robust boost for the parent company. Earlier this year, the Nasdaq-listed parent company JD.com raised approximately $4.4 billion in a secondary offering, also in Hong Kong Exchanges and Clearing (HKEX).