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Hong Kong stocks slammed by JD.com after share placement deal while market waits for Meituan earnings surprise

  • JD.com to pick up US$692 million worth of new shares in JD Logistics; other investors to buy US$398 million block at 10 per cent discount
  • Meituan and SenseTime are both due to issue their earnings report cards after close of trading today

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Stocks take a beating after a sell-off in JD.com, erasing gains accumulated during the week. Photo: EPA-EFE
Zhang Shidong
Hong Kong stocks fell, erasing gains accumulated during the week, after shares of JD.com tumbled following a US$1.1 billion fundraising by its logistics arm. Traders kept risk appetite in check pending more potential slip-up in Big Tech earnings.

The Hang Seng Index slid 2.5 per cent to 21,404.88 at the close of Friday trading, sending the benchmark to 0.1 per cent loss for the week. The Tech index slumped 5 per cent, while the Shanghai Composite Index slid 1.2 per cent.

JD.com, the third-largest Tech Index member, sank 5.3 per cent to HK$228.80 after agreeing to spend HK$5.4 billion (US$692 million) to buy 261.4 million new shares in JD Logistics to retain its 63.5 per cent ownership, slicing part of its US$13.7 billion cash hoard.

The logistics unit plunged by a record 14 per cent to HK$19.84. The firm separately raised US$398 million by selling 150.5 million new shares to outside investors. Both placements were priced at HK$20.71 each, a 10 per cent discount to the market, according to stock exchange filings.

Elsewhere, WuXi Biologics and Alibaba Health each plunged more than 8 per cent, while Tencent Holdings slipped 2.6 per cent to HK$356.40 for a second day of losses after reporting slower revenue and earnings last quarter. Alibaba Group Holding dropped 5.6 per cent to HK$107.40.

“After the decent rebound we have seen, corporate results and [listed companies’] business outlook is now becoming the focus and test for the market now,” said Ping An Securities in a report.

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