On Friday, two Chinese companies are scheduled to debut in public trading on the New York Stock Exchange, Waterdrop Inc. – a major independent insurance facilitator valued at $2 billion in 2020, and Onion Global Ltd. – an online fashion retailer counting 2.2 million active buyers.
Waterdrop is selling 30 million American depositary shares at $10 to $12 per share. At the high end, it would secure $360 million in IPO capital. Of that, up to $210 million may be provided by institutional investors Boyu Capital, HOPU, and Kevin Sunny Holding, according to the updated prospectus.
The Beijing-based insurance marketplace, a leading independent provider in China, has attracted a number of large banks to its IPO. Underwriters are Goldman Sachs (Asia) LLC, Morgan Stanley & Co. LLC, BofA Securities, Inc., ABCI Securities Co. Ltd., China Merchants Securities (HK) Co. Ltd., China Renaissance Securities (Hong Kong) Ltd., CLSA Ltd., Haitong International Securities Co. Ltd., Futu Inc., and Tiger Brokers (NZ) Ltd.
A big investor in Waterdrop is Chinese tech conglomerate Tencent Holdings Ltd. (HKEX: 0700; OTC: TCEHY), to hold 7.8% of the voting power in the company upon the IPO. Another backer is Switzerland’s Swiss Re Principal Investments Company Asia Pte. Ltd., which will hold 2% of the voting power.
Waterdrop posted 4.5 billion yuan in first-year premiums (FYP) for the first quarter of 2021, up 42% year-over-year. In the full year 2020, revenues doubled to $464.1 million, while losses rose to $101.7 million, according to the filing.
Waterdrop is expected to trade on May 7 under the ticker “WDH.”
Onion Global is offering 12.5 million ADSs at $7.25 to $9.25 per share, set to be traded under the ticker “OG.” At the top of the range, the fashion e-commerce platform from Guangzhou would raise $115.6 million in capital it plans to use for the development of private label brands and brand partnerships, expansion and diversification of its distribution channels.
Targeting the young consumer, Onion Global sells under the “3F” principle, selecting “fresh, fashionable and future” brands, some of which are overseas brands. The company achieved GMV of 1.3 billion yuan in 2020, up 36% year-over-year. Revenues in 2020 reached $584 million, up 33%, while income doubled from 2019 to $31.9 million, according to the filings.
AMTD Global Markets Ltd., Huatai Securities (USA) Inc., Roth Capital Partners LLC, Tiger Brokers (NZ) Ltd., and Valuable Capital Ltd. are securing the deal.
Onion Global has been compared to China’s Ruhnn Holding Ltd., which in April delisted from the Nasdaq in a privatization deal after just two years in public trading. Despite the support it gained from Alibaba Group (NYSE: BABA; HKEX: 9988), Ruhnn dealt with losses and was troubled by lawsuits and other scandals – its market value has suffered almost since Day One.
Onion Global, which has enjoyed fast growth even during Covid-19, will have to prove its value to the U.S. investor.