Kingsoft's Cheetah spin-off gets boost from Baidu, Xiaomi subscriptions

Internet search giant Baidu, smartphone brand Xiaomi and Hong Kong-listed Kingsoft have agreed to subscribe with Cheetah Mobile, the security software company that plans to raise about US$200 million in its initial public offering in the United States.

Analysts yesterday said that combined subscription, worth US$50 million, would help prop up the New York Stock Exchange-bound listing of Cheetah after the Beijing-based company - formerly known as Kingsoft Internet Software - downsized its IPO from the original US$300 million that was filed earlier this month.

Cheetah, a subsidiary established by Kingsoft in 2009, will offer 12 million new American depositary shares, each priced between US$12.50 and US$14.50. That would put Cheetah's market capitalisation at between US$1.8 billion and US$2.1 billion, according to its US Securities and Exchange Commission filing.

Jeff Hao, an analyst at China Merchants Securities, said: "Timing is not on the company's side because Alibaba's own IPO will require a lot of capital from the market."

Alibaba, the mainland's biggest e-commerce services provider, is expected to file for its share offering in New York within days. Speculation has been rife that Alibaba could raise more than US$20 billion, positioning its IPO as the largest in history.

Guotai Junan International analyst Ricky Lai expected the Cheetah IPO to still manage to attract investors with a specific interest on the growing mobile security applications market segment. "Baidu's and Xiaomi's subscription deals would certainly help raise the company's profile," Lai said.