China’s Ming Yuan Cloud joins a flurry of companies seeking to raise funds in Hong Kong this month
- The provider of cloud-based software services to Chinese property developers has secured funding from six cornerstone investors including GIC and Sequoia
- Shenzhen-based Ming Yuan Cloud is seeking to raise up to US$797 million, while several other IPOs and secondary listings are poised to launch this month
Some of the other offerings in the works include the secondary listing of logistics firm ZTO Express, which is reportedly raising as much as US$2 billion, and the IPO of Hillhouse Capital-backed JHBP Holdings, also known as Genor Biopharma. So far this year, 90 companies have raised US$22.61 billion, more than double the US$10.84 billion from 89 deals a year ago, data from Refinitiv shows.
Ming Yuan Cloud is selling 374.2 million shares, or 20 per cent of its share capital, at an indicative range of HK$15 to HK$16.5 per share, according to a term sheet seen by the Post. This could see the company raise between US$724 million and US$797 million.
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There is an overallotment option to sell an additional 56.13 million shares to meet strong investor demand. The deal’s joint sponsors and global coordinators are CICC and Citi, while the joint bookrunners include CMS, Futu, GF Securities, and Haitong International.
For the IPO, the company has already secured US$276 million from six cornerstone investors, including Singapore sovereign wealth fund GIC, Sequoia, China Structural Reform Fund, BlackRock and Fidelity International.
The offer is set to be priced on Friday, with trading on the main board scheduled to start on September 25.
“The emergence of 5G, cloud-computing … compels property developers to adopt more cloud-native software solutions in order to connect and engage with their customers and suppliers more effectively,” Ming Yuan said in its listing document filed to the exchange.
By 2024, the market for proptech software solutions in China is forecast to grow 65.5 billion yuan, from 17 billion yuan in 2019, according to data from Frost & Sullivan.
The company said it plans to use the IPO proceeds to upgrade its cloud-based application software and hire IT specialists.
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Ming Yuan said that last year it served 3,000 property developers, and 99 of them collectively contributed 42 per cent of its total revenue. Some of its clients include Wanda Group, Shimao, Agile, Sunac and China Overseas Land & Investment, it said on its website.
The company said while the Covid-19 pandemic in China during the first quarter had affected its software licensing business, this had been more than offset by gains in other areas. It said that the increased use of virtual reality tours by property agents because of travel restrictions had bolstered revenue for its customer relationship management cloud services.
For the three months ended March, its net profit more than doubled to 14.72 million yuan (US$2.16 million), from 6.88 million yuan a year ago. Its full-year 2019 net profit rose 42 per cent to 231.65 million yuan, from 163.03 million yuan in the previous year.