Category: IPO

Bank of Jiujiang seeks to raise US$500 million IPO in Hong Kong

Bank of Jiujiang, a lender in eastern China’s Jiangxi province, plans to raise a US$500 million initial public offering (IPO) in Hong Kong, according to a report from Bloomberg.

Based in a city on the southern banks of the Yangtze River, the Bank of Jiujiang has already begun reaching out to investment banks about the potential listing, in which is scheduled to list in the second half of 2017.

The lender’s move in seeking a Hong Kong listing follows other regional banks, which includes Guangzhou Rural Commercial Bank Co. and Jilin Jiutai Rural Commercial Bank Corp., and is aimed to boost its profile and raise funds for expansion.

According to data compiled by Bloomberg Show, financial institutions have completed US$18.2 billion of first-time share sales in the city last year, accounting for 72 percent of fundraising from new listings in 2016.

Founded in 2000 and operating as an urban commercial bank, Jiujiang Bank currently has 12 branches in China, with 10 of its branches located in the Jiangxi Province while 2 are situated in Guangzhou.

Backers of the Bank of Jiujiang includes the local government, state-owned Beijing Automotive Group Co. and Industrial Bank Co. The lender’s net income fell 0.6 percent in 2015 to 1.78 billion yuan (about US$257 million), according to its annual report.

Details of the IPO are still in deliberations, and there is no certainty that this potential listing will lead to a share sale.

By Vivian Foo, Unicorn Media

China’s New Century Healthcare targets US$129 million in Hong Kong IPO

Beijing-headquartered pediatric hospital operator New Century Healthcare is planning to raise up to HK$1 billion (about US$129 million) in an initial public offer (IPO) at the Hong Kong stock exchange this month.

The BoAML and CICC-sponsored pediatric healthcare provider had launched this IPO last week where 120 million new shares are pitched at a price ranging from HK$6.36 to HK $8.36 each.

According to the IPO prospectus of the company, there is also a potential 15 percent green-shoe option to sell an additional 18 million new shares.

Private equity firms CDH, Tianjin Yanshan Investment Management Co along with others also have a substantial stake in the hospital operator.

At present, New Century Healthcare operates three pediatric clinics in Beijing and since November last year, has diversified into obstetrics and gynecology with the acquisition of the BNC Women’s and Children’s Hospital.

Following this deal, about 20 percent of the proceeds will be allocated to upgrading its existing clinic, along with opening a new hospital and two clinics in other tier-1 cities such as Shanghai and Guangzhou.

Additionally, the company will also use 40 percent of the funds to buy one hospital and five clinics in tier-one cities, the company had announced while launching its IPO on December 29.

China’s growing healthcare expenditure is expected to reach 6.6 percent of the country’s GDP by 2020 with an aging population, increased chronic diseases, and rising disposable incomes are likely to lead to a higher demand for private and mid to high-end healthcare services among Chinese, the company had noted in its IPO prospectus.

Profits last year hit 34 million yuan (about US$5.1 million) on revenues of 116.8 million yuan. For the first six months of the year, profits stood at 31 million yuan on revenues of 226.5 million yuan.

The deal is expected to price on on January 11 while trading in the company’s shares will begin on January 18.

By Vivian Foo, Unicorn Media

Chinese online gaming firm G-bits Network Technology raises US$138 million in IPO

G-bits Network Technology Co. Ltd., a Chinese online gaming company backed by IDG Capital Partners and Fortune Capital, has completed its initial public offering (IPO) on the Shanghai Stock Exchange (SSE), raising an amount of 961 million yuan (about US$138 million).

Upon completing its IPO on the China’s A-share market, the Xiamen-based company is now valued at 5.5 billion yuan (about US$791 million).

The Chinese gaming firm has also set a record being the first online gaming company to complete an IPO on the Chinese A-share market. Other online gaming companies listed on the domestic stock exchanges were via reverse mergers previously.

Founded in 2004, G-bits is one of the leading online game developers in China, developing and producing massive multiplayer online games, which includes Underground Castle, Unbelievable Maze, and virtual reality-enabled games.

Besides, its portfolio also includes Asktao, the company’s first 2D TBS online game, which was approved as the green online game for teenager by China’s Ministry of Culture in 2006.

The company claims to have net earnings of 600 million yuan in 2016, which translates to approximately US$87.2 million

IDG Capital holds over 10% stake in G-bits currently,having invested in its series A funding round back in 2007. While Fortune Capital and the direct investment arm of Ping An Insurance invested 160 million yuan (about US$23 million) in the company in 2011.

By Vivian Foo, Unicorn Media

Warburg-backed e-Shang Redwood closes US$300 million investment in run up to IPO

A consortium of mainland China investors has invested US$300 million in Warburg Pincus-backed Asian logistics real estate developer e-Shang Redwood (ESR), as the company prepares for a potential initial public offering (IPO) this year.

The named investors for the pre-IPO round consist of top-tier mainland finance firms which include Hong Kong-based GF International Investment Management Ltd., Huarong International, Huarong Rongde, SPDB International, China Everbright Ltd., Everbright Securities and CMBC International.

As per details of the IPO, the company has since the beginning of 2016, been reportedly seeking an initial public offering in Hong Kong to raise around US$1 billion.

“Modern warehousing will continue to benefit from the rapid development of e-Commerce and the transformation of the retail sector in Asia and we believe ESR is well-positioned to further enhance its strong leadership position,” said Elyn Xu, Head of Structured Finance for GF Holdings, a Hong Kong affiliate of mainland-based brokerage GF Securities.

ESR was formed in January 2016, as the result of an all-stock merger between the Shanghai-based developer and operator of warehouses, e-Shang Cayman with Singapore-based logistic fund manager, The Redwood Group. The partnership was aimed to create one of the largest logistics real estate platforms in Asia.

Leveraging on the rapid growth of e-commerce in Asia, ESR has since then quickly built a 6.5 million square meters of projects in operation or under development in China, Japan, and South Korea with another over 6 million square meters in pipeline.

Prior to the latest round of investment, the company’s existing list of backers also comprise supports of major institutional investors which include Warburg Pincus, CPPIB, APG, PGGM and Goldman Sachs.

“2016 has been a very strong year for us with the completion of the Redwood merger, the substantial increase in development starts in our core markets of China, Korea, and Japan on the back of robust market demand from our best-in-class tenant relationships and the establishment of new financing institutional relationships in each of our market,” said Jeffery Shen, the co-CEO of ESR.

“The company is well-positioned to further accelerate its growth and solidify its market leading position across Asia over the next few years,” he further adds.

The company last secured a US$ 300 million commitment in July 2016 from Ping An Real Estate, the real estate investment and asset management platform of Ping An Insurance Company of China, Ltd. The purpose of the funding was for the development of logistics projects in Japan.

By Vivian Foo, Unicorn Media

China’s Sogou targets IPO at US$5 billion valuation to rival Baidu

China’s third-biggest search engine Sogou is expected to hold a U.S. initial public offering this year, according to a report by Bloomberg, based on its interview with Sogou CEO Wang Xiaochuan.

The IPO of Sogou, a subsidiary of Chinese internet giant Sohu.com (SOHU) is likely to release about 10 percent of its total share to the financial market in the United States at a market valuation of US$5 billion.

It is also reportedly said that Sogou, whose name translates as search dog, is planning to use part of the IPO proceeds to improve search results by backing companies developing artificial intelligence. Despite so, the company is yet to formally hire investment bankers to run the listing.

Though Sohu remains the leading investor, Sogou is also backed by Tencent after the China Internet service portal giant paid US$448 million for a 36.5% stake in the Sohu unit. In 2013, Tencent Holdings (TCEHY) and Sogou merged their search engine technology and services to better compete against China search leader Baidu.

According to Bloomberg, Baidu held a 44.5% share of mobile search queries in the third quarter, followed by Alibaba-backed Shenma at 20.8% share and Sogou at 10.2%.

But while Baidu remains the biggest provider across all platforms in China, it is under siege after a scandal over a medical advertising incident, giving smaller rivals including Sogou and Qihoo 360 Technology the opportunity to win over mobile users.

“Over the past year, we’ve seen a trend where people are finding themselves not trusting Baidu as much and some are even seeking a replacement,” Wang Xiaochuan, the CEO of Sogou since 2010 explained.

“So over the next year or two, as more people feel more comfortable with Sogou they’ll realise it is able to replace Baidu,” he adds.

At present, Sogou is the only search engine formally allowed to crawl through the published messages on Tencent’s WeChat platform, which has more than 800 million users.

The Tencent-backed search engine is also signing deals with device makers to ensure more smartphones are shipped with its software already installed, adopting a successful strategy previously used by microblog Weibo.

Sogou is also launching new search services aimed at bringing foreign results to Chinese audiences. By using translation technology, its customers will be able to search the English-speaking web with Mandarin search terms that will automatically translate the content back into Chinese.

“This is a turnaround year for us,” Wang Xiaochuan said.

With its IPO in planning, shares in Sohu increased by 4.9% to US$35.54 in New York on Tuesday, retaking its 50-day line for the first time in more than two months.

By Vivian Foo, Unicorn Media

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