Jiana Updates Financials Ahead of Expected IPO as China Homebuying Market Surges

The large-scale real estate project developer, based in Shenzhen, reported revenue and income growth for the half-year through October in its amended IPO filing.

Anna Vodopyanova
    Apr 28, 2020 12:00 PM  PT
Jiana Updates Financials Ahead of Expected IPO as China Homebuying Market Surges
author: Anna Vodopyanova   

Jiana Science and Technology Co. Ltd., a Chinese real estate project developer seeking U.S. IPO, has updated its financials with the SEC.

The company reported revenues of $794,500 for the six months through October 2019, up 95% year-over-year. Net income, Jiana said, was $282,600 in contrast to net loss of $206,600 in the same period of 2018. For the fiscal year ended April 2019, Jiana reported $3.5 million in revenue on income of $1.6 million.

The Shenzhen-based company focuses on large-scale real estate projects and owns exclusive rights to a development project located in Heyuan, Guangdong province. It operates Fangrong, a real estate e-commerce portal. Previously, Jiana also sold prepaid digital cards of tech giant NetEase Inc. (Nasdaq: NTES) and operated a software development business, but it has been transitioning to a "full-service" real estate company, according to its prospectus.

Jiana seeks to raise up to $11.5 million on the Nasdaq Capital Market under the symbol "JANA." The deal is underwritten by ViewTrade Securities Inc.

The company first publicly filed for an IPO in January, before the Covid-19 outbreak in China. In its amended filing, Jiana said the crisis has negatively impacted its business by temporary closures of offices and operations and delayed closures of construction projects.

"As a result of the on-going novel coronavirus, we expect our operation to experience slowdown or temporary suspension in production," Jiana wrote.

It also said, "The delay of our sales of real estate properties within our construction projects could result in a short fall of our cash balance."

However, the company expects the impact to be temporary and hopes to see its revenue growth rebound in the short term. In fact, the South China Morning Post reported on Tuesday that China is seeing an upsurge in homebuying as the country has been reopening from monthslong quarantine in recent weeks.

Specifically, first- and second-tier cities in China experienced a 37% rise in residential property deals in the week through April 20, according to China Real Estate Information Corp. (CRIC).

The SCMP cited Centaline Property Agency analyst Wenxi Lu, saying, "The demand was only deferred and did not disappear. With new homes flooding the market, and developers wooing homebuyers with measures such as online viewings [during the outbreak] and discounts, we expect another jump in the coming months."

In his February analysis of Jiana, CW columnist and founder of VentureDeal, Donovan Jones, wrote: "The market opportunity for providing real estate services via an online portal would appear to be significant as many Chinese consumers use their phones for so many other e-commerce-related activities."

However, he added, "Jiana's financial results and information present uncertainty for the IPO's prospects for success."

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