Friday, February 22, 2019
Martin Hennecke

Online services unicorn eyes US$4b IPO
Reuters and Joyce Chen

China's Meituan-Dianping, an online food delivery-to-ticketing services platform, is bringing its sizable initial public offering to Hong Kong, where it aims to raise over US$4 billion (HK$31.2 billion), people with knowledge of the deal said.

The firm filed plans late on Friday for the city's second multi-billion-dollar tech float this year after smartphone maker Xiaomi Corp's blockbuster IPO of up to US$6.1 billion.

Meituan-Dianping is, after Xiaomi, the latest company with a dual-class share structure to file for a Hong Kong listing, under the city's new rules designed to attract new economy and biotech companies.

The Beijing-based firm, backed by gaming and social media company Tencent Holdings (0700), was valued at around US$30 billion in a fundraising round last year.

It is aiming for a US$60-billion valuation with the IPO, though industry insiders said it may have difficulty reaching that target as it is still money-losing and relies on a cash-burning business model to boost growth. The firm is likely to list in October, said the people.

Meituan-Dianping's other backers include venture capital firms Sequoia Capital and DST Global, Singapore sovereign wealth fund GIC and state-owned investment company Temasek Holdings, as well as the Canada Pension Plan Investment Board.

Currently, chief executive Wang Xing owns 11.4 percent of the company, while Tencent owns 20.1 percent and Sequoia Capital 11.4 percent. Wang will remain controlling shareholder after the listing, the prospectus showed.

In its draft prospectus, which gave investors the first detailed look at its financial health ahead of the IPO, the company disclosed a 19 billion yuan (HK$22.79 billion) loss for 2017, steeper than in the previous two years.

Its adjusted net loss - which excludes the impact of fair value changes of convertible redeemable preferred shares and other items - was 2.85 billion yuan, smaller than losses of 5.35 billion yuan in 2016 and 5.91 billion yuan in 2015, the prospectus showed.

Meanwhile, Bank of Jiujiang starts its book building today, issuing 360 million H shares. Entry fee is HK$2,214 one broad lot.

The management expects the IPO to support the bank's capital adequacy by pushing it up several percentage points.

There will be 98 new companies listed in Hong Kong's stock exchange in the first half this year, up 44 percent year on year, according to an estimate by Ernst & Young. For the second half of 2018, E&Y believed that IPOs in the city will be dominated by retail, technology and financial sectors.

Previous news : Guangzhou R&F issues profit warning


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