JD Industrial, China's leading industrial supply chain technology and service provider—(07618.HK) December 2025 new stock analysis

$JD INDUSTRIALS(07618.HK)

Sponsors: Merrill Lynch (Asia Pacific) Limited Goldman Sachs (Asia) LLC  

Haitong International Capital Limited UBS Securities Hong Kong Limited

Offer Price: HK$12.70 - HK$15.50

Fundraising Amount: HK$2.682 billion - HK$3.274 billion

Total Market Cap: HK$34.00 billion - HK$41.496 billion

Board Lot 200 shares 

Minimum Subscription Fee HK$3,131.26

Subscription Period December 3, 2025 - December 8, 2025

Grey Market Date: December 10, 2025

Listing Date December 11, 2025 (Thursday)

Total Offer Shares 211.2088 million shares

International Placement 190.0878 million shares, ~90.00% 

Public Offering 21.121 million shares, ~10.00%

Allocation Mechanism Mechanism B

Interest Calculation Days: 1 day

Stabilizing Agent Merrill Lynch

Issue Ratio 7.89%

P/E Ratio 46.46

Company Profile

JD Industrial is China's leading industrial supply chain technology and service provider, leveraging its "Taipu" full-link digital industrial supply chain solution to deeply integrate "digital intelligence" and "commodities," providing customers with industrial supply and end-to-end digital supply chain services covering commodities, procurement, fulfillment, and operations, helping customers achieve supply assurance, cost reduction, efficiency improvement, and compliance goals.

Since 2017, the company has been developing MRO procurement services and has grown into a top player: In 2024, it ranked first in China's MRO procurement service market with nearly three times the scale of the second-place player, while also becoming the largest service provider in the domestic industrial supply chain technology and service market with a 4.1% market share.

In terms of customer and supply chain layout, JD Industrial has significant advantages: As of the twelve months ended June 30, 2025, it served over 11,100 key enterprise customers, with H1 2025 clients covering ~60% of China's Fortune 500 and over 40% of global Fortune 500 companies in China; during the same period, its industrial SKUs reached 81.1 million, covering 80 categories, with a supply network composed of 158,000 manufacturers, distributors, and agents, demonstrating industry-leading product coverage and supply capabilities.

For the three years ended December 31, 2024 (2022, 2023, 2024) and the first six months of 2024 and 2025:

JD Industrial's revenue was approximately RMB14.135 billion, RMB17.336 billion, RMB20.398 billion, RMB8.620 billion, and RMB10.250 billion, respectively, with a CAGR of 20.13%;

Gross profit was approximately RMB2.541 billion, RMB2.799 billion, RMB3.313 billion, RMB1.457 billion, and RMB1.902 billion, respectively, with a CAGR of 14.19%;

Net profit was approximately RMB-1.269 billion, RMB5 million, RMB762 million, RMB291 million, and RMB451 million, respectively, turning profitable in 2023;

Gross margin was approximately 17.98%, 16.14%, 16.24%, 16.90%, and 18.55%, respectively;

Net margin was approximately -8.98%, 0.03%, 3.73%, 3.38%, and 4.40%, respectively.

Source: LiveReport Big Data

The company's revenue and gross profit have grown steadily over the past three years, with net profit turning positive in 2023, mainly due to a significant reduction in losses from changes in the fair value of convertible preferred shares; the decline in gross margin was primarily due to increased contributions from product revenue, which has a lower gross margin compared to service revenue.

As of June 30, 2025, the company had inventory of RMB1.250 billion, receivables of RMB118 million, time deposits of RMB6.102 billion, cash on hand of RMB4.560 billion, and operating cash flow of RMB292 million.

II. Cornerstone Investors

JD Industrial (07618.HK) has introduced 7 cornerstone investors for this IPO, who have signed agreements with the company to subscribe for shares totaling no more than approximately US$170 million (~HK$1.324 billion), accounting for ~44.4% of the offer shares (~93.8718 million shares based on the mid-point offer price).

Complete list of cornerstone investors:

1. M&G Investments - Globally renowned asset management group

2. CPE Elm Investment Limited (CPE Yuanfeng) - Leading Chinese private equity investment firm 

3. Aurora Investment Management - Well-known investment management company

4. Ivy Capital Management (Hong Kong) Limited - Asset management firm focused on Asian markets

5. Gangrui Capital Management Limited - Professional investment institution

6. Schonfeld Strategic Advisors - Internationally renowned hedge fund management company

7. Burkehill Global Management, LP - Investment management firm focused on global markets

Total of 13 underwriters

Sponsor Track Record:

Merrill Lynch (Asia Pacific) Limited

Goldman Sachs (Asia) LLC

Haitong International Capital Limited

UBS Securities Hong Kong Limited

2. Allotment Rate and New Share Analysis

(From AIPO)

Current margin financing has been oversubscribed by 8x.

Allotment Rate Analysis

The required principal and financing amounts for each tier of Group A financing are as follows:

Group B heads require subscription funds of HK$6.27 million. The required principal and financing amounts for each tier of Group B financing are as follows:

Based on the mid-point offer price of HK$14.10, the total disclosed listing expenses are approximately HK$151 million, with fundraising of ~HK$2.978 billion, accounting for ~5.05%—relatively low compared to the fundraising amount.

Should we subscribe? See my analysis below:

After three failed listing attempts, JD Industrial has finally entered the sprint stage for its Hong Kong IPO. If successful, JD Industrial will become the sixth JD Group-affiliated company to go public, following JD.com, JD Logistics, JD Health, Dada Group, and Deppon Logistics.

In August 2020, JD Industrial completed its Series A funding round, led by GGV Capital, with participation from Sequoia Capital and CPE Yuanfeng. In the same month, it acquired Suzhou Gongpinhui.

In January 2021, it completed its Series A-1 funding round.

In March 2023, it completed its Series B funding round, raising US$300 million at a cost of US$2.59 per share. This round was co-led by Abu Dhabi sovereign fund Mubadala and Abu Dhabi investment fund 42XFund, with participation from major asset management group M&G, BPEA EQT (formerly Baring Private Equity Asia) under global private equity giant EQT, and existing shareholder Sequoia China.

This JD Industrial IPO! The fundraising amount is HK$2.682 billion - HK$3.274 billion, with a total market cap of HK$34.00 billion - HK$41.496 billion—quite large. Above the HK$10 billion Stock Connect threshold, if the company wants to issue market-driven and no one supports the price, even a 50% drop would still qualify for Stock Connect—it depends on whether there's motivation to push it higher.

JD Industrial, part of the JD family, has previously listed JD Health, JD Logistics, JD.com, and JD Logistics on the Hong Kong market, none of which made money, except for JD Health, which made some. JD's stocks seem to have never broken issue price, making slight profits—Brother Dong is quite considerate of the market.