IFR 03.08.2019

Canaan is one of three bitcoin mining
equipment makers that applied for a Hong
+ONGû)0/ûBEFOREûTURNINGûTOûTHEû53û%BANGû
)NTERNATIONALûANDû"IT-AINû4ECHNOLOGIESûAREû
the two others.
0EOPLEûCLOSEûTOûTHEû#ANAANû(ONGû+ONGû)0/û
have told IFR that tight regulatory scrutiny
INûTHEûCITYûMADEûITûDIFlCULTûFORûTHEûDEALûTOû
proceed. The same factor prompted Ebang
ANDû"IT-AINûTOûLETûTHEIRû(ONGû+ONGû)0/û
applications lapse as well.
Canaan and Ebang were both targeting to
raise US$1bn each early last year after
Bitcoin prices hit record highs at the end of
û"IT-AINûWASûLOOKINGûATûAû53BNû
FUNDRAISINGûSIZEûLASTûYEAR
The value of Bitcoin fell sharply in 2018.
Having reached US$18,690 in December
2017, Bitcoin was at US$3,811 at the end of

2018. In 2019 the level peaked above
      US$12,000 in June and was around
      US$10,500 on Friday.
      #REDITû3UISSE û#-"û)NTERNATIONAL û
      $EUTSCHEû"ANKûANDû-ORGANû3TANLEYûWEREû
      joint sponsors for Canaan in its previous
      (ONGû+ONGûmOAT
      Canaan did not respond to an email
      seeking comment.

LIZHI FM PLANS US$100m US IPO

LIZHI FM, a Chinese online audio platform, is
planning to raise about US$100m from a US
IPO as early as this year, according to people
with knowledge of the matter.
Citigroup and Credit Suisse are leading the
transaction, said the people.
4HEû'UANGZHOU
BASEDûPODCASTûAPPûOPERATORû
enables users to set up their own radio
programmes, create and upload audio clips.
,IZHIû&-ûHASûCOMPLETEDûSEVERALûROUNDSûOFû
fundraising since it was established in 2013.
Its investors include Orchid Asia Group
-ANAGEMENT û8IAOMI û3HUNWEIû#APITALûANDû
-ATRIXû0ARTNERSû#HINAû4HEûLASTûROUNDûINû
early 2018 secured US$50m.
!SûOFû$ECEMBERû û,IZHIû&-ûHADûABOUTû
250m users.
,IZHIû&-ûDIDûNOTûRESPONDûTOûANûEMAILû
seeking comment.
"IGGERûRIVALû8IMALAYAû&- ûWHICHûHASû
about 470m users, is also planning to list, as
EARLYûASûNEXTûYEARûINû(ONGû+ONGûORûTHEû53 ûINû
an IPO that could value the company at
around US$5bn, IFR reported earlier.

KUNLUN REVIVES GRINDR IPO PLAN

Chinese gaming company BEIJING KUNLUN TECH
has revived the IPO plans of gay dating app
GRINDR as a US national security panel is no
longer opposing the deal.
3HENZHEN
LISTEDû+UNLUNûlRSTûANNOUNCEDû
plans in August 2018 to list US-based Grindr.
The Chinese company, however, held back

after the Committee on Foreign Investment in

the United States (CFIUS) showed concern over

how personal data are handled within Grindr.

)NûANûANNOUNCEMENTûLASTû-ONDAYû+UNLUNû

said the CFIUS is not opposing the Grindr IPO.

)Nû-AYû+UNLUNûSAIDûITûHADûAGREEDûTOûAû

request by the CFIUS to sell Grindr before

June 30 2020. It also said it would shut down

Grindr’s China operations and make sure

the company would not send any sensitive

user data to China.

According to the latest announcement,

+UNLUNûPLANSûTOûLISTû'RINDRûONûANûOVERSEASû

stock exchange. It did not specify the timing

OFûTHEûLISTINGûORûTHEûFUNDRAISINGûSIZE

Grindr posted a net loss of Rmb29m

(US$4.2m) in 2018 on revenues of Rmb572m.

+UNLUNûBOUGHTûAûûSTAKEûINû'RINDRûINû

2016 and the remainder in 2017, for a total

cost of about US$245m.

CSRC TO REVIEW PIM’S RIGHTS PLAN

The China Securities Regulatory

Commission has accepted to review a

proposed Rmb3.5bn (US$508m) A-share

rights issue from Shanghai-listed PENGXIN

INTERNATIONAL MINING.

The company plans to offer up to 661m

rights shares on a 3-for-10 basis.

Shanghai Pengxin Group, the biggest

shareholder of the company, controlling

shareholder Jiang Zhaobai and four other

shareholders have committed to take up their

rights in full. The six hold a combined 38% stake.

Proceeds will be used for a gold mine

project in South Africa and to replenish

working capital.

The A-share of the company closed at

Rmb4.74 on July 30, up 1.3%.

PHARMARON BEIJING PLANS HK LISTING

3HENZHEN

LISTEDûPHARMARON BEIJING said last

Tuesday it had received board approval to

LISTûINû(ONGû+ONG

The H-share offer will be for a maximum

15% of the enlarged share capital, the

medical contract research company said. At

Pharmaron’s current market capitalisation

of Rmb23.6bn (US$3.4bn), the IPO could

raise around Rmb3.5bn-equivalent.

Pharmaron Beijing’s shares rose 0.4% to close

at Rmb35.92 last Tuesday after the

annoucement. The stock was listed on

3HENZHENû3TOCKû%XCHANGEûINû*ANUARYûTHISûYEAR

EQUITIES ASIA-PACIFIC

Chipscreen sets Star board

P/E record

„ CHINA Retail investors pile into IPO despite hefty valuation

Retail investors rushed to subscribe to the

Rmb1.02bn (US$148m) Shanghai tech board IPO

of SHENZHEN CHIPSCREEN BIOSCIENCES despite its

valuation at a record earnings multiple for the

new board.

The retail tranche of the IPO was about 2,956

times oversubscribed, the highest subscription

rate so far for the Star board.

The shares were sold at a P/E of 467.5,

more than 15 times the industry average ratio

of 30.79 in the past month. ChiNext-listed

Betta Pharmaceuticals, Chipscreen’s closest

comparable, has a 2018 P/E of 135.25.

During pricing consultations on July 26, bids

ranged from Rmb13 to Rmb27.60 per share.

According to Pu Songtao at sponsor Essence

Securities, Chipscreen is a rare company with a

rapidly growing drug portfolio, which explains

the high P/E ratio.

“There are no totally similar listed

pharmaceutical companies so far,” he said, while

stressing that traditional valuation methods

such as earnings multiples are not suitable for

rapid-growth companies like Chipscreen. The

company’s innovation and R&D capabilities,

market niche, and commercialisation capabilities

are more important than short-term profitability,

Pu said.

The stellar trading performance of the first

25 companies that listed on the tech board has

apparently persuaded investors to put valuation

concerns aside.

According to Chipscreen, 3.19m retail investors

subscribed to the deal, which compares with

2.76m for the first tech board IPO from Suzhou

HYC Technology.

Twenty-five companies were listed on the Star

board on July 22. All soared on the first day of

trading, with the biggest gainer up 400% and

even the weakest performer closing 84% above

its IPO price. As of Wednesday, all 25 companies

were still trading above their issue prices.

Chipscreen had planned to sell 80% of the

IPO to institutional investors and 20% to retail,

excluding the 14% of the IPO for company

executives and the sponsor, but the strong retail

response has triggered a clawback mechanism

that requires the issuer to sell 30% of the deal to

retail investors and 70% to institutions.

The IPO comprises 50m A-shares, or 12.2% of

the enlarged capital, at Rmb20.43 each.

Karen Tian, Fiona Lau