Tencent-backed J&T Express fell in Hong Kong IPO debut

Shares of Indonesia’s J&T Express fell 1.33% when it went public on Friday.

The logistics service provider traded at 11.84 Hong Kong dollars ($1.51) on Friday morning, after opening at HK$12.

The HK$3.92 billion ($500 million) IPO is the second largest listing in Hong Kong this year, after premium Chinese liquor company ZJLD Group. The Chinese “baijiu” maker, backed by KKR, plunged nearly 18% on their first day of trading on April 27.

Investors include Chinese tech giant Tencent, U.S.-based venture capital firm Sequoia, Chinese private equity firm Boyu, SF Express and Singapore’s sovereign wealth fund Temasek.

J&T Express is listing in an uncertain economic environment, characterized by hiking inflation, high interest rates and ongoing conflict such as the Israel-Hamas war and Ukraine invasion.

“In the third quarter of 2023, global IPO activities remained sluggish due to macroeconomic and geopolitical uncertainties. Hong Kong’s global IPO ranking dropped to eighth following a historically slow third quarter,” said KPMG in a report published on Oct. 9.

“The Hong Kong market has not recovered as much as we would like,” Irene Chu, partner at KPMG China, told CNBC, highlighting that the third quarter “continued to be very soft.”

J&T had initially aimed to raise at least $1 billion in the IPO but halved the target amount on weak investor demand, according to Reuters.

Companies that want to go public have “become more realistic” in their pricing, said Ringo Choi, Asia-Pacific IPO leader at EY. “The IPO pricing is dropping significantly by more than 50% or even 70%.”

China is J&T’s largest market, where it delivered nearly 83% of its total parcels last year, serving the likes ecommerce giants like Pinduoduo and Alibaba’s Taobao and Tmall. It held a 10.9% market share by parcel volume in 2022, the company said in its