China's JD.com Files for U.S. IPO

By Dow Jones Business News, 
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JD.com Inc., a major Chinese e-commerce company, has filed to raise up to $1.5 billion in an initial public offering in the U.S., in what would be one of the biggest Chinese Internet IPOs in the U.S.

JD is a major competitor to Alibaba Group Holding Ltd., China's biggest e-commerce company, which is also considering going public in what is expected to be a much larger IPO.

JD's potential listing comes at a time when U.S. investors' sentiment toward Chinese tech stocks is recovering. U.S.- listed Chinese Internet stocks such as Baidu Inc., as well as those listed on the Hong Kong Stock Exchange such as Tencent Holdings Ltd., have enjoyed big gains since last year.

While Alibaba runs online marketplaces where numerous merchants sell their goods to consumers or business customers, JD's business model is more similar to that of Amazon.com Inc., in that it is a direct seller of goods held in sprawling warehouses through its websites. In China, this business model has helped JD differentiate its services from Alibaba's, helping the company become a major competitor in the country's fast-growing consumer e-commerce market. As of the end of September, JD had 35.8 million active customer accounts, the company said in its filing with the Securities and Exchange Commission.

JD's business model of running its own warehouses and delivery services makes its operations capital-intensive. According to the filing, JD posted a net loss of $343 million and revenue of $8.1 billion in the first nine months of 2013. The company also posted net losses in 2011 and 2012, but its losses have narrowed over the past few years.

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