Fangdd Network Group Ltd. (Nasdaq: DUO) celebrates its debut on Wall Street Friday, raising $78 million in its initial public offering.
Shares in the Shenzhen-based company jumped 8% from the opening price of $13 to $14.08 in the first hours of trading on the Nasdaq Global Market.
China’s largest online real estate marketplace sold 6 million American depositary shares and holds a market value of approximately $1.1 billion, as reported by the Nasdaq. Underwriters may purchase up to an additional 900,000 ADSs after the IPO.
Bookrunners on the offering are Morgan Stanley & Co. LLC, UBS Securities LLC, China International Capital Corp. Hong Kong Securities Ltd. and AMTD Global Markets Ltd.
Fangdd's founder Yi Duan and his team came to Times Square to attend the opening ceremony and celebrate its new journey as a public company.
“Today, on the stage of the international capital market, we will accept the market inspection in a more transparent way, continue to enhance the efficiency and experience of doing business on the platform through technological innovation and fully empower China's residential service industry,” Duan said at the market site.
An investor in Fangdd, the chairman and founding partner of consulting-first equity fund Vision Knight Capital, David Zhe Wei, said the timing of the IPO was “perfect” ahead of the upcoming holidays and “uncertainties.”
Wei told CapitalWatch, “The property industry, the property agent business has had extremely low efficiency in China as well in the rest of the world. We believe that Fangdd will be the company to improve the efficiency by leveraging its tools.”
Wei, former chief executive of Alibaba Group Holding Ltd. (NYSE: BABA) and a now a director at Fangdd, invested in the company in 2014 and participated in its IPO celebrations in New York on Friday.
The tech-driven mobile platform offers smart tools and solutions for real estate agents in China. It had 1.07 million registered agents on the platform as of June 2019. In addition, Fangdd operates the largest online database of properties. It had 131 million properties as of June, the company reported.
In its prospectus, filed with the U.S. Securities and Exchange Commission, Fangdd said it intends to use the proceeds of the sale to boost its R&D, sales and marketing. The rest will be used for working capital and general corporate purposes.
It's been a shaky year for Chinese company listings in New York amid the trade war crisis and some loss of credibility. Last week, the freeze on China IPOs ended with two same-day floatations - by e-learning platform Youdao Inc. (NYSE: DAO) and plastic surgery company Aesthetic Medical International Holdings Group Ltd. (Nasdaq: AIH). Both stocks experienced weak first days and were both trading today below the issue price.
In his financial analysis of Fangdd, CW columnist and founder of VentureDeal, Donovan Jones, wrote, "If Fangdd can continue to grow as a prominent online real estate marketplace, perhaps it can turn around a growing perception problem among U.S. investors in Chinese firms."
(Co-authored by Anthony Russo and Belinda Zhou)