Weibo, NetEase’s Cloud Village set to raise nearly US$1 billion between them in Hong Kong IPOs
- Weibo, the ‘Twitter of China’, kicks off its Hong Kong offering as it seeks to raise up to US$547.3 million
- NetEase’s music streaming unit prices its Hong Kong IPO at midpoint of marketed range, raising US$421 million
Two Chinese internet companies are set to raise close to US$1 billion between them in Hong Kong initial public offerings.
The maximum offer price represents a 16 per cent premium to its Nasdaq-listed American depositary receipt (ADR) closing price at US$42.79 (HK$333.69) last Friday. Each ADR represents one ordinary share, and its Hong Kong shares will be fully fungible to its ADRs.
The Hong Kong stock sale will end on Thursday, when the final offer price will also be determined. Trading on the Hong Kong bourse, under stock code “9898” is scheduled to begin next Wednesday, December 8.
Chinese issuers have typically set the final price of their Hong Kong secondary offerings at a tight discount to their US-listed shares, because a big deviation from their ADR levels can lead to choppy trading of their stock after debut. Weibo’s ADR has fallen about 32 per cent from its year-to-date peak of US$62.66 reached in July.
“We help the content creators on our platform to engage and interact with their followers and build up their social assets to create social value and monetisation opportunities,” the company said in its prospectus.
Owned 44.4 per cent by Chinese online media giant Sina Corp, Weibo counts Alibaba Group, the owner of this paper, as its second largest shareholder with a 29.6 per cent stake.
Weibo generates revenues primarily from customers who purchase advertising and marketing services. This accounted for 86 per of its total revenues for the six months ended June this year.
The social media giant has 566 million monthly active users and 246 million average daily active users. The Beijing-based company plans to use the net proceeds to grow its user base, and upgrade its IT infrastructure.
The joint sponsors and joint global coordinators of the deal are Goldman Sachs, Credit Suisse, Citic Securities, and CICC.
It will trade on Hong Kong’s main board under the stock code “9899”, and is scheduled for debut on Thursday. Bank of America, CICC and Credit Suisse are the joint sponsors and joint bookrunners of the deal.
These two IPOs precede two more sizeable deals that are poised to kick off in December.
These mega IPO deals would give the Hong Kong stock exchange a shot in the arm. The city has been devoid of new issuances of over US$1 billion since Li Auto raised about US$1.7 billion in August, data from Refinitiv shows.