Core Viewpoint - JD Industrial has officially passed the listing hearing at the Hong Kong Stock Exchange, marking the sixth company under the JD Group to go public, which is a significant move in the industrial supply chain sector [3][14]. Financial Performance - For the eight months ending August 31, 2025, JD Industrial reported total revenue of 14.1 billion yuan, an increase of 18.9% compared to the same period in 2024 [3]. - Revenue from 2022 to 2024 was 14.135 billion yuan, 17.336 billion yuan, and 20.398 billion yuan, respectively, with a compound annual growth rate of 20.1% [6]. - JD Industrial transitioned from a net loss of 1.269 billion yuan in 2022 to a net profit of 4.8 million yuan in 2023, and further to 762 million yuan in 2024, representing a 158-fold increase year-over-year [6]. - In the first half of 2025, revenue from continuing operations was 10.25 billion yuan, up 18.9% year-over-year, with a profit of 451 million yuan, a 55% increase [6]. - The gross margin improved to 18.6% in the first half of 2025, up from 16.9% in the same period last year [6]. Market Position - JD Industrial is the largest player in China's MRO procurement service market, with a transaction volume nearly three times that of its closest competitor as of 2024 [7]. - The company has provided approximately 57.1 million SKUs across 77 product categories, supported by a network of around 121,700 manufacturers, distributors, and agents [7]. - As of June 30, 2025, JD Industrial served about 11,100 key enterprise clients, including around 60% of China's Fortune 500 companies and over 40% of global Fortune 500 companies operating in China [8]. Business Model - JD Industrial operates a hybrid business model combining "platform + self-operated," with self-operated sales accounting for 94% of its revenue in 2024 [10]. - The company leverages JD's robust logistics system to offer next-day and even same-day delivery services across the country [10]. - JD Industrial focuses on building digital infrastructure, providing a comprehensive one-stop procurement platform for industrial products, which includes supply assurance, cost reduction, and efficiency enhancement [10]. Challenges - JD Industrial's revenue dependency on the JD Group platform remains significant, with income from the platform accounting for approximately 39.7% of total revenue in 2024, despite a declining trend [11][12]. - The company's gross margin has been relatively low, with figures of 18.0%, 16.1%, and 16.2% from 2022 to 2024, indicating a need for improved profitability [13]. - The industrial e-commerce sector is highly competitive, with established players like Alibaba's 1688 and Zhenkunhang, as well as numerous emerging companies [13]. Future Outlook - JD Industrial's IPO proceeds will primarily be used to enhance supply chain capabilities, expand geographically, pursue strategic investments or acquisitions, and meet general corporate and operational funding needs [14]. - The successful IPO will mark a significant milestone in JD Group's strategy to transition from consumer internet to industrial internet [14].

Core Viewpoint - JD Industrial has initiated its IPO roadshow in Hong Kong, aiming for a potential listing in December 2025, marking it as the sixth company under the JD Group to go public [1][3]. Company Overview - JD Industrial, a subsidiary of JD Group focused on industrial supply chain technology and services, was established in July 2017 [3]. - It ranks first in China's MRO procurement services market, with a transaction volume nearly three times that of the second-largest competitor [3]. - The company holds a market share of 4.1% in the industrial supply chain technology and services sector [3]. Financial Performance - JD Industrial's revenue has grown significantly from 14.1 billion yuan in 2022 to 20.4 billion yuan in 2024 [3]. - The company achieved profitability in 2023, with net profit rising from a loss of 1.3 billion yuan in 2022 to a profit of 760 million yuan in 2024 [3]. - For the first half of 2025, JD Industrial reported a net profit of 450 million yuan [3]. Market Potential - The Chinese industrial supply chain market is vast, with the MRO market expected to exceed 2.1 trillion yuan in 2024, maintaining an annual growth rate above 15% [4]. - The market is highly fragmented, with the top five companies holding less than 8% market share, indicating significant consolidation opportunities [4]. - The digital penetration rate in enterprise procurement is only about 11% in 2024, suggesting substantial growth potential through digital transformation [4]. Business Model and Offerings - JD Industrial offers a comprehensive digital supply chain solution called "Taipu," covering four key areas: products, procurement, fulfillment, and operations [5]. - As of the end of 2024, JD Industrial has partnered with approximately 121,700 suppliers, providing around 57.1 million SKUs across 77 product categories [5]. Ownership and Valuation - JD Group holds approximately 78.84% of JD Industrial, maintaining absolute control [5]. - The company has attracted notable investors, including Sequoia China and Abu Dhabi sovereign funds, with a pre-IPO valuation of about 6.7 billion USD [5]. Revenue Sources - In 2024, JD Industrial generated 8.1 billion yuan from JD Group's platform, accounting for 39.7% of total revenue, although this is a decrease from 47.1% in 2022 [6]. - The company faces challenges with slowing revenue growth and low gross margins, with gross margins of 18.0%, 16.1%, and 16.2% from 2022 to 2024 [6].