JD.com’s FinTech Unit Mulls Withdrawing Shanghai Public Listing

After the restructuring of Ant Group caused by changing business regulations in China, JD.com may delay taking its FinTech unit public, the South China Morning Post (SCMP) reported on Monday (March 8), citing sources.  

Recent restructuring at JD.com along with the halting of Ant Group’s initial public offering (IPO) by Chinese regulators last year prompted the company to re-evaluate taking JD Technology — its FinTech unit formerly named JD Digital and JD Finance — public on Shanghai Stock Exchange (SSE), sources told the news outlet. The company was supposed to list on the Star Market.

JD.com, one of China’s largest eCommerce platforms, restructured in January to fold its artificial intelligence and cloud computing businesses into its FinTech division. JD Technology could go public in the future, the sources told SCMP.

Because its business operations, name and senior management team have all changed since the plan was originally filed, the company thinks it is fitting to withdraw the planned IPO, one of the sources told SCMP. JD.com, which owns 36.8 percent of JD Technology, likely won’t see a backlash from a decision to withdraw the listing. Investors are confident about the company’s business capabilities.

JD Technology’s IPO application is currently in limbo. The SSE and the China Securities Regulatory Commission (CSRC) have not approved or denied the company’s application.

Chinese regulators recently launched mandates taking effect in 2022 that would pose stricter capital requirements for FinTechs. Consumer finance firms operating online would be required to have capital similar to mainstream financial institutions.

Beijing is also probing big technology firms — Ant, Tencent, JD.com— over alleged over-lending to consumers. The companies, along with other tech firms in the country, now have to widely share consumer loan data with Chinese regulators and banks.

China’s top four technology firms lost billions in December as investors got cold feet after Beijing’s announced probe into Alibaba’s business practices. Regulators also recommended that Ant Group scale back to target payments alone.