Week of Sep. 28: Chindata, Yalla, Boqii, Lixiang Set IPO Terms

Despite market uncertainties, Chinese companies are seeing continued interest from U.S. investors. These four are ready for their public debuts.
九月. 26, 2020 02:11
Week of Sep. 28: Chindata, Yalla, Boqii, Lixiang Set IPO Terms

The week of Sep. 28 will be a busy one for Chinese IPOs. So far, four firms have announced their offering terms and two have their New York listing dates set. The four are Chindata Group, Yalla Group, Boqii, and Lixiang Education.

Chindata Group Holdings Ltd.

Of the four, Chindata Group's IPO will be the largest. Bain Capital's Chinese operator of data centers may raise up to $540 million.

The company said it expects to sell 40 million American depositary shares at $11.50 to $13.50 apiece on the Nasdaq. The underwriters may purchase an additional 6 million shares upon the deal.

Securing the deal are Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., UBS Securities LLC, and China Renaissance Securities (Hong Kong) Ltd.

As of Dec. 2019, Chindata held 21.5% market share in the carrier-neutral hyperscale data center market in Asia-Pacific emerging markets, according to a Frost & Sullivan report. The company has two major clients: ByteDance and Wangsu, which generated 81.6% and 7.1% of Chindata's total revenues for the first half-year.

According to the prospectus, Chindata booked $114.7 million in revenue for the six months through June 2020 – scoring 266% year-over-year growth. Net loss in the half year narrowed to $8.4 million. For the full year 2019, the company reported $120.7 million in revenue on losses of $24 million.

Chindata said it will use the new capital for new data center projects, potential investments, and working capital.

Having publicly filed a couple of weeks back, Chindata was fast-tracked to its New York debut. The company is scheduled to lift off in public trading on Wednesday, Sep. 30., under the stock symbol "CD."

Yalla Group Ltd.

Yalla Group is offering 18.6 million ADSs, with the expected price range of $7 to $9 per share.

At the top end of the range, Yalla would bank $167.4 million in its initial public offering. Of that, a principal shareholder, Orchid Asia, may acquire up to $30 million's worth.

Yalla is the largest voice-chat platform in the Middle East and North Africa (MENA) in terms of revenue. In the second quarter, the company said in its filings, it had 12.5 million monthly users. They spent a cumulative 309.5 million hours in live voice chat rooms, or Yalla rooms, and played 407.2 million rounds of casual games on Yalla Ludo.

In the six months through June, Yalla posted revenues of $52.8 million, nearly double year-over-year. Net income also doubled to $25.2 million from the same period a year ago.

Based in Dubai, Yalla Group is headed by Chinese entrepreneur Tao Yang. Yang comes from serving at ZICT Technology, Beijing Feinno Communication Technology Co., and Chinese tech giant ZTE Corp.

Underwriters may purchase an additional 2.8 million ADSs on the deal. They are Morgan Stanley & Co. LLC, Haitong International Securities Co. Ltd., and Tiger Brokers (NZ) Ltd.

Like Chindata, Yalla Group had a short run-up to IPO. The company is scheduled to lift off in public trading on Wednesday, Sep. 30., on the New York Stock Exchange. It is expected to list under the symbol "YALA."

Boqii Holding Ltd.

China's largest pet parent platform said in a filing this week that it expects to sell 7 million ADSs priced at $10 to $12 apiece. Each ADS represents 0.75 of a Class A ordinary share.

At the top of the range, Boqii would raise $84 million, which would propel its market value over $1 billion.

Bookrunners are Roth Capital Partners, LLC, CMB International Capital Ltd., and Valuable Capital Ltd. They may purchase up to an additional 1.05 million ADSs upon the offering.

The company expects to list on the NYSE under the ticker symbol "BQ" on the week of Sep. 28.

Boqii sells pet products, provides pet training courses and pet-related content, seeking to monetize on the growing "pet humanization" trend. It served 3.5 million average MAUs and for the 12 months through March booked $109 million in revenues on losses of $24.9 million.

Boqii publicly filed for a U.S. offering earlier this month, seeking to raise capital for content innovation, membership system development and research and development, including big data technology. The company also aims to boost its private-label brand sales and warehousing capabilities.

Lixiang Education Holding Co. Ltd.

Of the four, Lixiang's IPO is expected to be the smallest, at up to $36.3 million. The Lishui-based private school operator seeks to sell 3.3 million ADSs at $9 to $11 per share, according to an updated filing this week.

The company may list on the Nasdaq Global Market under the ticker symbol "LXEH" on the week of Sep. 28.

Founded in 2001, Lixiang was among the top ten private school operators in Zhejiang Province in terms of student enrollments for the 2019-2020 school year, according to Frost & Sullivan.

In the first half of 2020, revenues were $12.3 million, a 3.1% increase from the same period a year ago. Net income dropped 24.9% year-over-year to $3.8 million, according to the filing.

AMTD Global Markets Limited and Loop Capital Markets LLC are securing the deal in New York. The underwriters may acquire an additional 500,000 shares upon the debut.

Separately, Kingsoft Cloud Holdings Ltd. (Nasdaq: KC) completed its follow-on public offering on Thursday. The Chinese cloud service provider raised $248 million by selling 8 million shares priced at $31 apiece. A number of insider shareholders have also sold 8.4 million ADSs of the company.

Kingsoft Cloud's IPO is among the most successful Chinese listings of 2020. The company lifted off in May in a $510 million offering at $17 per share and enjoyed a strong trading run. Friday, shares in Kingsoft Cloud fell back to $28.33 per ADS intraday.