Two IPOs Down, Two to Follow; Apartment Rental Q&K Sets Terms

Real estate marketplace Fangdd and apartment rental platform Q&K, both China-based, are scheduled to become publicly traded in New York in the first days of November.

Anna Vodopyanova
    Oct 25, 2019 6:00 PM  PT
Two IPOs Down, Two to Follow; Apartment Rental Q&K Sets Terms
author: Anna Vodopyanova   

Two Chinese IPOs took place on Wall Street on Friday with more lined up after months of a freeze on Asia listings. The two freshly-listed were Youdao Inc. (NYSE: DAO) and Aesthetic Medical International Holdings Group Ltd. (Nasdaq: AIH), each closing on debut in the red, well below the issue price. However, that will not hold back the slew of wannabe-listeds.

In a week, Fangdd Network Group Ltd., a real estate marketplace that is China's largest in a number of parameters, is scheduled to lift off, raising up to $105 million for shares priced between $13 and $15 each.

Then, on Tuesday of the following week, Q&K International Group Ltd., a long-term apartment rental in China, is set to become publicly traded.

Today, Q&K has filed the terms of its expected IPO. The Shanghai-based company said it will offer 5.2 million American depositary shares priced in the range of $17 to $19 apiece. At the top end, it will thus raise $98.8 million.

In its amended prospectus filed today with the U.S. Securities and Exchange Commission, Q&K said some of its existing shareholders have expressed interest in acquiring up to $45 million in the IPO. The shareholders are Crescent Capital Investments Ltd., Newsion One Inc., Newsion Two Inc. and Youzhen Inc. Prior to the IPO, Crescent Capital is one of the largest shareholders in Q&K, holding a stake of 30.6% in the company and 1.3% of the voting power, according to the filing.

Underwriters in the IPO will have an option to acquire an additional 780,000 additional ADSs, Q&K said. They are Morgan Stanley & Co. LLC and China International Capital Corp. Ltd. Co-managers in the offering will be Prime Number Capital LLC, China Everbright Securities (HK) Ltd., Tiger Brokers (NZ) Ltd. and China Securities (Int'l) Corp. Finance Co. Ltd.

As reported in a filing earlier this month, for the nine months through June, the company had revenue of $130.8 million up 51% year-over-year. Net loss was $54.4 million, at an increase of 15% from the same period last year. For the full year 2018, Q&K reported $129.6 million in revenue, up 70% from 2017. Net loss was at $72.8 million, double from the preceding year.

With the funds from the IPO, Q&K hopes to expand its network of apartments and boost its technology and infrastructure.

Q&K has applied to list on the Nasdaq Global Market under the symbol "QK" and is scheduled to lift off on Nov. 5.

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Youdao, a Chinese e-learning platform backed by tech giant NetEase Inc. (Nasdaq: NTES), today raised $220.2 million in its IPO and the private placement of shares. Offered at $17 per ADS, the company's stock ended 26% lower on debut, at $12.50.

Aesthetic Medical, which providers plastic surgery in China, raised $30 million for shares priced at $12 each. It closed on Day One at $10.03 per ADS, down 16%.

Fangdd is expected to debut on Friday, Nov. 1, under "DUO" on the Nasdaq Global Market.

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