JD Logistics is planning to raise $3.4 billion in an IPO.

Three issues that stand out:

First, JD attracted a world-class network of largely US-based investments banks, including Bank of America and Goldman Sachs. Nevertheless, they chose the Hong Kong exchange for their listing. This reflects the fact that Chinese and US markets are increasingly separating from one another.

Second, last-mile logistics is skyrocketing. JD Logistics spiked 47% in the last year. In 2017, JD Logistics was a wholly-owned subsidiary of parent JD.COM. Since then, it has diversified and expanded, as 46% of its business now comes from other customers, like Skechers. Today, 4 years later, JD Logistics has 900 warehouses, 190,000 employees, and 190,000 customers!

Third, JD.com has already secured seven anchor investors. These firms, including SoftBank Group Corp.Temasek, and Blackstone, have already agreed to buy $1.53 billion of stock. This reflects strong interest in the firm as well as in logistics.

All global logistics companies should be watching, as Chinese logistics giants like Alibaba Logistics (Cainiao), ZTO Express and others are no doubt planning new moves as well.

Benjamin Gordon, Cambridge Capital