Tencent subsidiary backs Cheetah Mobile IPO

While the initial public offering of e-commerce giant Alibaba is drawing much attention from investors, mainland security software company Cheetah Mobile has quietly added a subsidiary of Tencent as a major subscriber to its own offering in New York today.

In its regulatory filing in Hong Kong, Cheetah parent Kingsoft confirmed that TCH Copper subscribed on Monday for up to US$20 million of the 12 million new American depositary shares its spin-off will list on the New York Stock Exchange.

Tencent, Asia's largest listed internet company, owns about 18 per cent of Cheetah's issued share capital.

Cheetah, formerly known as Kingsoft Internet Software, plans to raise US$200 million from its offering, which is down from the original US$300 million that was filed early last month.

Guotai Junan International analyst Ricky Lai said yesterday that Cheetah had generated interest from specific investors because "it provides popular security and productivity applications used by many mobile users" on the mainland, as well as a platform that supported large marketing business partners.

"Since its offering is much smaller than Alibaba's IPO, Cheetah is likely to succeed in raising the amount it has targeted," Lai said.