The China Securities Regulatory Commission (CSRC) has not yet given approval for JD Technology to proceed with its Hong Kong initial public offering (IPO), causing the listing to be delayed, sources said.
The financial technology, cloud and artificial intelligence arm of JD.com was hoping to lodge its first filings with the Hong Kong Stock Exchange by the end of March, followed by the launch of the $2 billion IPO later this year.
It has appointed banks for the listing and applied to the CSRC in late January seeking an offshore listing, according to the regulator’s website.
However, it has not yet managed to secure approval from the CSRC, which is needed for the domestically incorporated company to list offshore, including in the Chinese-controlled territory of Hong Kong.
The main regulatory concern about JD Tech’s planned IPO is linked to the firm’s consumer finance business, said one of the four people, who, like the other sources, declined to be named due to confidentiality constraints.
Delay Highlights Uncertainties
The development highlights the uncertainties that Chinese companies, mainly those from the technology sector, continue to face in their offshore listing attempts amid growing scrutiny of their business structures and data security, among other things.
It also poses a challenge to JD.com’s newly appointed CEO Lei Xu even as the company seems to have come off relatively unscathed from China’s regulatory crackdown that has hit growth, fundraising and share prices of its rivals over the past year.
JD.com and JD Tech did not respond to emailed requests for comment. The CSRC did not respond to a faxed request for comment.
It was not immediately clear how JD Tech is planning to resolve the regulator’s concerns or what is the new time frame for the listing.
• Reuters, with additional editing by George Russell