“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 prospectus, citing Frost & Sullivan.

In May, it acquired China-based Fengwang Express for 1.18 billon yuan from largest domestic player SF Express, building on its acquisition of express delivery business from Chinese logistics firm Best in late 2021.

The Indonesian logistics provider delivered a total of more than 14.5 billion parcels in 2022 across China and Southeast Asia, up from 11.5 billion in 2020. In Southeast Asia, it is the largest operator with a 22.5% market share in terms of parcel volume, based on Frost & Sullivan data. Alibaba-owned Lazada, GoTo’s e-commerce arm Tokopedia and Sea Limited‘s Shopee, are among its customers, the prospectus showed.

It posted a net profit of $1.57 billion in 2022 but went into the red in the first six months of this year Net losses came in at $666.8 million, due to gross losses from operations in China and new market expansion in 2022, among others.

“In the long term, to continue to realize our revenue potential and achieve profitability, we plan to further grow our parcel volume and market share, maintain a flexible pricing strategy, control costs, narrow gross loss and improve gross margin, and enhance operating leverage,” said J&T in its prospectus.

“There is some sharp short-term pain for J&T in Indonesia because of the TikTok Shop ban, as J&T was (profitably) carrying the majority of the TikTok Shop’s millions of orders a day in Indonesia prior to the ban,” said Momentum Works in a Oct. 17 blog post.

J&T Express acknowledged in its filing that “there remain significant uncertainties” on how the new rules would impact different e-commerce and social media platforms in Indonesia, “some of which are our customers.”

But the company said it will not be adversely impacted as the revenue from social e-commerce platforms in Indonesia “remained immaterial” to the business.

In 2022 and the first six months of this year, revenue from social e-commerce platforms in Indonesia contributed only 4% and 6% to the company’s revenue respectively, said J&T.

“We believe that although [the new e-commerce regulation] may have an impact on our customer composition in Indonesia in the near term, this new regulation will not have a material adverse effect on our business operations and financial performance in the long term.”