Real Estate Platform Fangdd Sets Price Range Ahead of $105 Million IPO

The Chinese company expects to become publicly traded on the Nasdaq Global Market on November 1 under the ticker symbol “DUO.”

Belinda Zhou
    Oct 24, 2019 10:00 AM  PT
Real Estate Platform Fangdd Sets Price Range Ahead of $105 Million IPO
author: Belinda Zhou   

Fangdd Network Group Ltd., scheduled to become publicly traded next week, expects to sell 7 million American depositary shares priced at between $13 and $15 each, according to its latest filing.

At the top of the expected range, the Shenzhen-based company would raise $105 million, down from the $150 million Fangdd targeted earlier this month according to its preliminary prospectus. Underwriters may purchase an additional 1.05 million ADSs for over-allotment.

A shareholder in Fangdd, Fangdd Decent International Ltd., has indicated interest in purchasing up to $20 million worth of ADSs in the IPO, the report stated. Fangdd Decent owns 6.1% equity in Fangdd according to the Wednesday filing with the U.S. Securities and Exchange Commission.

Upon the IPO, Fangdd will see a market capitalization of $1.2 billion at the midpoint of the proposed range, taking over-allotment options into consideration. 

Fangdd provides SaaS-based solutions to real estate agents in China for managing customers, property listings, capital and transaction data. The company cited market research by Frost & Sullivan, saying it supplied services to more than 45% of all real estate agents in China, counting 2 million, as of December 2018. Fangdd added that by June 2019, it had 1.07 million registered agents on its platform, with 300,000 active agents.

In addition, Fangdd operates the largest online database of properties, according to research by Frost & Sullivan it cited in its filing. As of June, it had 131 million properties, the company reported.

"Our mission is to make it easy for real estate agents to do business and empower them to achieve their dreams," Fangdd wrote in the filing. 

The real estate platform operator reported revenue of $233.7 million for the six months through June, soaring 55% year-over-year. The company turned profitable during the first half-year of 2019, seeing its net income hit 97.2 million yuan ($14.2 million) in contrast to net loss of 4.5 million yuan ($600,000) in the corresponding period of 2018.

Fangdd said it intends to use 40% of the proceeds of its IPO in New York to enhance its research and development, 20% in boosting its sales and marketing and use the rest for working capital, as well as general corporate purposes.

Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and UBS Securities LLC will act as the underwriters on the expected IPO, together with China International Capital Corp. Hong Kong Securities Ltd. and AMTD Global Markets Ltd.

The platform, founded in 2011, expects to become publicly traded on the Nasdaq Global Market on November 1 under the ticker symbol "DUO."

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