Indonesian Courier J&T Express Applies For an IPO in Hong Kong

Indonesian courier company J&T Express has applied to an initial public offering (IPO) in Hong Kong, according to a report by SCMP.

J&T, which dominated the Southeast Asian express delivery market last year, is reportedly considering a share sale ranging from US$500 million to US$1 billion, according to sources familiar with the matter cited in a Bloomberg report.

However, it must be noted that no final determination has been reached, and there is a possibility for changes in the size and timeline of the IPO.

J&T Express' Filing

As per the company's filing, J&T Express, known as Jitu, meaning "speedy rabbit" in Chinese, has enlisted Morgan Stanley Asia, Merrill Lynch (Asia-Pacific), and China International Capital Corp Hong Kong Securities as the overall coordinators for its planned IPO in Hong Kong.

The filing specifies that no public offer or invitation will be extended in the city until J&T's prospectus has been officially registered with the Registrar of Companies in Hong Kong, in adherence to the Companies Ordinance.

This move by J&T coincides with a subdued recovery in Hong Kong's IPO market, with an estimated 100 companies expected to go public in the city this year, according to PwC.

During the first half of 2023, Hong Kong observed a total of 30 IPOs, marking an 11% increase compared to the corresponding period in 2022.

However, funds raised diminished by 14%, amounting to HK$17 billion, in contrast to HK$19.7 billion recorded in the first half of the preceding year, as outlined by PwC data.

In 2015, J&T Express was established by Tony Chen Mingyong, the CEO and founder of Oppo, a Chinese smartphone manufacturer, and Jet Li Jie, who currently holds the positions of chairman and CEO at the courier company. Jet Li Jie previously served as the CEO of Oppo Indonesia.

Leading in Southeast Asia

Recognized for its cost-effective services, J&T Express emerged as the leading provider of express delivery services in Southeast Asia last year, securing a significant market share of 22.5% based on parcel volume, as stated by Frost & Sullivan. The company managed 2.513 billion domestic parcels in 2022, compared to 1.153 billion in 2020.

Expanding its operations in mainland China's logistics market in 2020, J&T Express acquired Best's courier business for 6.8 billion yuan, a strategic response to the intense price competition among prominent players in the logistics industry. Notably, J&T Express even offered its services for less than 1 yuan per package in Yiwu, a manufacturing hub in eastern Zhejiang province.

As J&T Express continues to expand its international presence, the company has successfully established operations in various countries, such as Brazil, Mexico, the United Arab Emirates, Saudi Arabia, and Egypt. This growth reflects J&T Express' commitment to extending its reach and services beyond its home market.

Furthermore, there are expectations that Cainiao Network, the logistics arm of Alibaba Group Holding, with an estimated value exceeding US$20 billion, will also venture into an initial public offering (IPO) in Hong Kong during the current year, according to SCMP.