J&T Express Goes Public in Hong Kong, Faces Modest Initial Drop

Indonesia’s J&T Express experienced a 1.33% dip in its stock price during its debut on the Hong Kong Stock Exchange. Although the second-largest public offering of the year for J&T Express, The logistics service provider’s shares initially traded at HK$12, but started Friday’s morning session at HK$11.84, equivalent to $1.51. 

The firm is among Asia’s key courier service groups, headquartered in Shanghai. 

The newly acquired funds are expected to be used for network expansion, infrastructure enhancements, and sorting and warehouse capabilities reinforcement. Additionally, J&T Express plans to explore new markets and invest further in research and development. 

J&T Express, with backing from investors like Chinese tech giant Tencent, U.S.-based venture capital firm Sequoia, Chinese private equity firm Boyu, SF Express, and Singapore’s sovereign wealth fund Temasek, is making its debut on the Hong Kong Stock Exchange in a somewhat uncertain economic climate. 

The company’s valuation stood at $20 billion after a funding round in 2021, which saw it raise $2.5 billion with the support of investors such as Sequoia China, Tencent, and SIG China. 

During its initial public offering (IPO), J&T Express experienced strong investor demand. It received applications for 1.4 times the shares allocated for local buyers and 1.9 times the shares reserved for offshore buyers, priced at HK$12 apiece. An overallotment option for about 49 million shares is available, which could contribute around HK$567 million if exercised. 

Established in 2015, J&T Express has steadily grown its presence in the logistics sector. The company operates across thirteen countries, including Indonesia, Vietnam, Malaysia, Brazil, Saudi Arabia, and China. Its extensive clientele comprises merchants and consumers using major e-commerce platforms such as Shopee, Lazada, Taobao, and Shein. 

J&T Express collaborated with TikTok Shop in Indonesia until regulatory changes led to the cessation of the social media firm’s e-commerce activities, raising questions about the potential impact on J&T Express’ local performance.

The brainchild of entrepreneurs Tony Chen Mingyong, the founder and CEO of Chinese smartphone maker Oppo, and Jet Li Jie, who serves as chairman and CEO of the courier company, J&T Express views itself as a cost-effective service provider. 

It achieved the status of the top express delivery operator in Southeast Asia in 2022, holding a 22.5 percent market share in parcel volume, according to Frost & Sullivan. Leveraging its growing footprint, J&T Express ventured into China and Southeast Asia in 2020 and expanded further into Saudi Arabia, the United Arab Emirates, Mexico, and Brazil. 

Based on data from Frost & Sullivan, J&T Express claims to have held the number one position in Southeast Asia by parcel volume in 2022 and to be among the leading operators in China by market share. The company’s progress extended to five additional countries in Latin America, the Middle East, and North Africa in 2022, with its ambition to expand its footprint globally.

J&T Express has unveiled a compound annual growth rate of 118% from 2020 to 2022. It was accompanied by a 36% reduction in adjusted EBITDA loss during the same period, mainly driven by the company’s flourishing operations in China. 

The company’s initial plan to go public in the United States was shifted to Hong Kong due to mounting regulatory scrutiny faced by Chinese firms from Beijing authorities in international listings. 

While J&T Express primarily originates from Indonesia, it has substantially expanded its presence in China, most through the acquisition of Best Inc.’s express delivery business in 2021. Additionally, it gained support from a consortium of Chinese entities.

Morgan Stanley Asia, Bank of America Securities, and China International Capital Corp Hong Kong Securities have assumed the role of overall coordinators for J&T Express’ Hong Kong IPO. 

Charles Hou, Vice President of J&T Express, emphasized the company’s rapid expansion and service enhancement since its founding in 2015. He views the listing on the Hong Kong Stock Exchange as a significant milestone in the company’s journey, 

“We cherish our roots and remain committed to seamlessly connecting the world through our customer-centric approach and dedication to efficiency,” he stated.

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