Alibaba-backed Huitongda plans to go public in Hong Kong


By Ben Otto

Huitongda Network Co. is planning an IPO in Hong Kong, the youngest Chinese logistics services company to test investor appetite for the Asian financial center.

Nanjing-based Huitongda, which specializes in the sale of goods and supply chain services in China’s rural areas, intends to use the proceeds from an offer to expand its consumer base and invest in IT infrastructure, says in a prospectus filed on the Hong Kong Stock Exchange Friday.

There was no schedule for the offering, nor did he say how much to plan.

Huitongda’s pre-IPO investors include the Chinese tech titan Alibaba Group Holding Ltd., which holds 19% of the shares. Alibaba invested 4.5 billion yuan ($ 697.8 million) in the company in 2018 to expand its reach in rural China.

Huitongda’s public offering plan comes as online sales in China rise amid the pandemic, and follows the steps of other Chinese logistics specialists to seek listings in Hong Kong.

In May, JD Logistics Inc., a spin-off from e-commerce giant Inc., got more than 3 billion REIT IPOs. JD Logistics shares trade about 4% above their IPO price, while SF REIT shares trade well below it.

In recent years, Huitongda has expanded from selling merchandise such as household appliances to offering agricultural inputs and house building materials, among others. It also provides rural retail store services for running online stores and ensuring stable supply chains, with stores reaching more than 19,000 cities and villages in 21 provinces.

Huitongda was China’s largest trading platform by transaction value, serving retailers in the lower end of the market in 2020, it said in its filing, citing a report by Frost & Sullivan. It recorded a loss of CNY 280.0 million on sales of CNY 49.63 billion in 2020.

Citigroup and China International Capital Corp. are among the advisors for the offer.

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