Full Truck Alliance Co. Ltd. has set the terms for its initial public offering worth up to $1.6 billion.
The SoftBank-backed freight solutions platform is offering 82.5 million of its American depositary shares in the range of $17 to $19 per share. Each ADS represents 20 ordinary shares. Upon the IPO, underwriters may purchase an additional 12.4 million ADSs to cover over-allotments.
In the prospectus, amended Tuesday, FTA said that Fidelity International and Invesco Ltd. have signed up to acquire a cumulative $600 million worth of shares in the IPO. In addition, FTA said that concurrently with the IPO the company will carry out a private placement of an aggregate of $200 million worth of shares to Ontario Teachers' Pension Plan Board and an entity affiliated with Mubadala Investment Company PJSC, an Abu Dhabi-based sovereign investor.
Securers on the offering are Morgan Stanley & Co. LLC, China International Capital Corporation Hong Kong Securities Ltd., Goldman Sachs (Asia) LLC, UBS Securities LLC, Huatai Securities (USA) Inc., Citigroup Global Markets Inc., Nomura Securities Int'l Inc., China Renaissance Securities (Hong Kong) Ltd., and CLSA Ltd.
FTA's ADSs have been approved for a listing on the New York Stock Exchange under the symbol "YMM." The IPO is scheduled for next Tuesday, June 22.
Based in Nanjing, FTA connects shippers with truckers on its platform. Citing China Insights Consultancy, the company claims to be the world's largest digital freight platform by gross transaction value in 2020.
In March 2021, FTA counted 1.4 million active shippers on its platform. In all of 2020, it facilitated 71.7 million shipping orders with GTV of $26.6 billion. According to CIC, the company served 20% of China's heavy-duty and medium-duty truckers last year.
In 2020, FTA booked $395.5 million in revenue, at a 4% increase from 2019. Losses have more than doubled to $531.9 million last year, according to the prospectus. In the first quarter of 2021, FTA recorded doubled revenues year-over-year, at $132.9 million, on widened losses of $30.2 million.
Full Truck Alliance was founded by Peter Hui Zhang, who formerly served at tech conglomerate Alibaba Group (NYSE: BABA; HKEX: 9988), which backs a number of logistics companies. Several other top managers of FTA are or have been affiliated with Alibaba and tech giant Baidu (Nasdaq: BIDU; HKEX: 9888). SoftBank is one of FTA's principal shareholders, holding 22.2% equity in the company prior to the IPO. Sequoia Capital is another big investor in the Chinese platform.
FTA first publicly filed with the U.S. SEC in late May, closely following the IPO filing by ForU Worldwide Inc., a Chinese freight dispatch platform known as Fuyou Trucks. While FTA claims it's the largest in terms of GTV, Fuyou said in its prospectus that it's China's largest technology-driven road freight transportation platform in terms of revenue. Fuyou also has a big tech backing it – JD Logistics (HKEX: 2618), a unit of JD.com Ltd. (Nasdaq: JD; HKEX: 9618).
Despite the uncertainty surrounding Chinese listings in the United States, investors' appetite is strong for Asia-based companies with big prospects. These weeks, a number of big Chinese IPOs are celebrated in New York. Last Friday, Kanzhun Ltd. (Nasdaq: BZ), a popular HR platform in China, raised nearly $1 billion in its IPO; ride-hailing giant Didi Chuxing is also approaching its New York debut, expected to be the largest IPO by a Chinese company in the U.S since 2014 and one of the largest listings of 2021 globally.