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IPO

IPO

China’s largest job site Liepin seeks US$400 million in Hong Kong float

PUBLISHED : Saturday, 16 June, 2018, 9:01am
UPDATED : Saturday, 16 June, 2018, 9:01am

Wise Talent Information Technology, which operates China’s largest job recruitment site Liepin, is seeking to raise as much as HK$3.12 billion (US$400 million) in Hong Kong – the second biggest IPO by a unicorn company this year after Ping An Good Doctor’s US$1.1 billion listing in April.

Wise Talent, backed by venture capital firm Matrix Partners China, plans to sell 88 million shares at an indicative price range of HK$28.5 to HK$35.5, it said on Friday.

The retail tranche – 10 per cent of the total offer size – will hit the market from Tuesday to Friday next week and it will start trading on June 29 on Hong Kong’s main board.

“Chinese leaders always say talent is the country’s foremost resource, so companies all over the country want to upgrade their talent,” Rick Dai Kebin, chairman, CEO and founder of Wise Talent, told a press conference in Hong Kong on Friday.

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He said that since a lot of overseas highly-skilled Chinese are gradually returning to China for employment and using our platform, so there is a big demand in the market. “We want to take advantage of this opportunity and the appetite for high-end talent,” adding that the IPO was well-timed because of the rapid growth in Chinese tech start-ups and innovation.

Liepin, launched in 2011, is China’s largest job recruitment site by revenue. Its database included 248,600 companies, 38.9 million professionals and 101,800 headhunters in 2017.

In 2017, its revenues jumped 40 per cent year on year to 825 million yuan (US$128.4 million), more than 95 per cent of which came from corporate customers. It also generated profit for the first time in three years, posting a net income of 7.55 million yuan.

Dai said the company wants to increase its domestic market share by adding more companies and individual users.

He said the reason for choosing Hong Kong as a listing destination was because “the IPO will have a good effect on the brand and bring a more open and public image to our customers, and help improve trust and build partnerships”.

Forty per cent of the IPO proceeds will be used to enhance research and development capabilities, such as hiring AI and data specialists to improve existing matching algorithm and develop AI-empowered voice and facial recognition technologies to interview potential job candidates via robots.

About 25 per cent will be used for potential acquisitions or investments, 25 per cent in improving sales and marketing initiatives, and the remaining 10 per cent for working capital purposes.

Still, Wise Talent’s IPO value has been halved from the US$800 million reported in January by IFR, a Reuters publication.

China’s securities regulator warns of bubble in new economy IPOs

Hong Kong’s attempt to turn itself into a listing hub for new economy companies has started to bear fruit. Five major technology companies have debuted since September. These will be followed by Xiaomi’s upcoming IPO, which is expected to be the world’s largest since 2014.

But of the five tech listings since last year, three have dropped below their IPO prices – ZhongAn, Yixin Group, and Razer. Compared with their respective peaks, their market value has evaporated by more than HK$160 billion.

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