(CapitalWatch, Nov. 9, New York) More than a year has passed since Atour Lifestyle first publicly filed for an initial public offering in New York. Amid China's review of its overseas listing rules and Washington's regulatory tightening of foreign-company listings, the company kept it filings updated with the U.S. SEC. Now, the Chinese hotel operator is finally at the finish line: its IPO is set for Friday, Nov. 11.
Atour Lifestyle Holdings Ltd. will raise up to $61.8 million by selling 4.75 million of its American depositary shares. The price range is expected at $11 to $13 per share, with the greenshoe option to acquire an additional 712,500 ADSs upon the IPO.
The deal is underwritten by BofA Securities, Inc., Citigroup Global Markets Inc., China International Capital Corporation Hong Kong Securities Ltd., CMB International Capital Ltd., Redbridge Securities LLC, and Tiger Brokers (NZ) Ltd. The company said in its securities filing that Snow Lake Entities has offered to buy up to $10 million worth of the shares in the IPO.
The IPO will mark the first U.S.-China listing since late August, and it will be the second-largest Chinese flotation in New York this year. After China's massive crackdown of 2021, many IPO applicants shelved their plans or turned to the domestic markets. These days, it's still rare for a non-emerging company from China to seek a U.S. listing and get to the finish line.
Atour is a recognized Chinese hotel chain, operating both high-end and budget hotels. According to market research by Frost & Sullivan, Atour said in its prospectus that it was the largest upper midscale hotel chain in China in terms of room number as of the end of 2021. As a nice benefit, Atour is backed by Asia's largest travel booking platform, Trip.com Group Ltd. (Nasdaq: TCOM).
In the first half of 2022, Atour booked $144.3 million in revenue on $10.3 million in net income. Sales declined 3% year-over-year amid continued Covid-19 lockdown woes. For 2021, the company reported $296.5 million in revenue, a 37% growth from 2020, while net income increased to $19.3 million from $5.2 million in the preceding year.
Funds from the IPO will expand Atour's hotel network in China, boost its service offerings and enhance branding. A portion of the proceeds will be used for IT and technology, including digital operating systems and data analytics.
In its initial filings with the U.S. SEC, Atour targeted $300 million in IPO funds. But after all the turbulence, out of Hong Kong and Chinese companies seeking a New York IPO in 2022, only AMTD Digital Inc. (NYSE: HKD) was able to break the $100 million mark with its $125 million IPO in mid-July.
Atour is set to break the ice on the Nasdaq Global Market under the ticker symbol "ATAT" this Friday.