COUNTRY REPORT CHINANet revenue increased by 123% to
Rmb1.5bn (US$217m) in Q1 2019 from
Rmb666.5m in Q1 2018. Adjusted net
income was Rmb35.3m against a net loss of
Rmb149.9m in Q1 2018.
Founded in 2013, DouYu, or “Fighting
Fish”, is one of the leading live game-
streaming/esports platforms in China. It
was valued around US$2.4bn when Tencent
invested US$630.7m in the company in
March 2018. Pre-IPO, Tencent owns a 40%
stake through Nectarine Investment, a fully
owned subsidiary.
Morgan Stanley, JP Morgan, Bank of America
Merrill Lynch and CMB International are joint
bookrunners.
› EDVANTAGE’S IPO IS TEXTBOOK SO FAR
Books of EDVANTAGE GROUP’s up to HK$805m
(US$103m) IPO are covered, a person with
knowledge of the transaction has said.
The higher education provider is selling
250m primary shares or 25% of the capital
in a HK$2.48–$3.22 range.
The international tranche comprises
225m shares and the retail tranche 25m.
There is an over-allotment option of 37.5m
shares.
Cornerstone investor Ariana Capital has
agreed invest US$27m.
Pricing is scheduled on July 9.
Edvantage operates two private higher
education institutions in China and one
private vocational education institution
in Australia. It mainly offers business
programmes.
The company posted a profit of
Rmb175m (US$25m) for the year ended
August 31 2018, up 9.4% year on year. It
earned about Rmb40m for the two months
ended October 31 2018.
BNP Paribas is the sole sponsor.
› CIMC VEHICLES PRICES IPO AT HK$6.38
Trailer maker CIMC VEHICLES has priced its IPO
at the bottom of a HK$6.38–$8.08 range to
raise HK$1.7bn, a person with knowledge
of the transaction said.
The subsidiary of Shenzhen-listed China
International Marine Containers sold 265m
primary shares for a 15% free float. The
final price translates to a 2019 P/E of seven.
Books were covered multiple times with
demand from long-only institutions and
hedge funds.
There is a greenshoe option of 15% of the
base deal.
Two cornerstone investors have
committed to purchase about US$85m of
the deal: SAIC Motor Corporation (US$50m)
and Shandong Linglong Tire (US$35m).
CIMC Vehicles manufactures semi-trailers
and truck bodies. It will use the proceeds
to develop new manufacturing or assembly
plants in the US and Europe, for research
and development, to repay the principal
and interest on bank borrowings, and for
working capital and general corporate
purposes.
CIMC Group controls 63.3% of the
company.
The shares are expected to be listed on
July 11.
Haitong International is the sole sponsor.
It is also joint global coordinator and lead
manager with ICBC and Nomura.› MANPOWERGROUP LIKELY TO PRICE LOWMANPOWERGROUP GREATER CHINA, a subsidiary of
NYSE-listed ManpowerGroup, is likely to
price a Hong Kong IPO of up to HK$630m at
the bottom of the HK$9.90–$12.60 range, a
person with knowledge of the transaction
has said.
The employment agency is selling 50m
shares, or 25% of the enlarged share capital.
At the bottom of the range, the deal would
bring in HK$495m.
The range translates to a 2019 P/E of
11.5–14.6 and a 2020 P/E of 9.2–11.7, as well
as a market capitalisation of US$253m–
$322m.
There is a greenshoe option of 15% of the
base size.
The shares will be listed on July 10.
Huatai Financial is the sole sponsor.› COMPANIES FILE FOR A-SHARE IPOSSeventy-seven companies with a combined
fundraising target of Rmb47bn filed to the
China Securities Regulatory Commission
for A-share IPOs in the last week of June,
before the validity of their audited results
expired.
The tally excludes companies that
applied to the Shanghai tech board.
The CSRC released the draft prospectuses
of the 77 applicants last Friday.
Of these, 29 have filed for Shanghai
IPOs totalling Rmb26.1bn, while 11 have
filed for Shenzhen IPOs (Rmb4.2bn)
and the remaining 37 for ChiNext IPOs
(Rmb16.4bn).
Two companies, JIANGSU SWORD
AGROCHEMICAL (Rmb2.01bn) and POSTAL SAVINGS
BANK OF CHINA (Rmb2.12bn), plan to raise
more than Rmb2bn from Shanghai IPOs,
while nine target over Rmb1bn. They
are KEMAI CHEMICAL (Rmb1.42bn), JIANGSU
BOQIAN NEW MATERIALS STOCK (Rmb1.16bn),
ALLIED MACHINERY (Rmb1.05bn), XINYAQIANG
SILICON CHEMISTRY (Rmb1.2bn), NINGBO DEYE
TECHNOLOGY (Rmb1.02bn), BEIDAHUANG
KENFENG SEED (Rmb1.03bn), BEIJING ZEHO
WATERFRONT ECOLOGICAL ENVIRONMENT TREATMENT
(Rmb1.45bn), GOODFARMER FOODS HOLDING GROUP(Rmb1.06bn), and CHINA NATIONAL GOLD GROUP
GOLD JEWELLERY (Rmb1.25bn).
The average size of the 37 proposed
ChiNext deals is only Rmb443m. Only
theme park operator FANTAWILD HOLDINGS
plans to raise more than Rmb1bn.
Citic Securities is the sponsor of eight of
the IPOs, followed by Minsheng Securities on
seven.› CRSC KICK OFF TECH BOARD IPOCHINA RAILWAY SIGNAL AND COMMUNICATION
conducted price consultation for a
Rmb10.5bn tech board IPO last Friday, the
biggest listing so far on the new Shanghai
board.
The company will announce the issue
price this Monday, and books will open for
a day on July 10.
CRSC, which is already listed in Hong
Kong, has lowered the number of A-shares
on offer from 2.2bn to 1.8bn, or up to
17% of its enlarged capital, while the
fundraising target remained unchanged.
Of the shares on offer, 30% or 540m
shares have been allocated to a strategic
tranche for sponsor CICC, special asset
management plans, and other strategic
investors.
Under the tech board rules for IPOs of
over Rmb5bn, the sponsor is required to
buy at least 2% of the IPO shares and hold
them through a subsidiary for two years, up
to a cap of Rmb1bn.
Other early IPO applicants have agreed a
relatively high fee to compensate sponsors
for the additional risk, but CSRC has
offered no special incentive.
According to the filing, the company is
paying an underwriting fee and sponsor
fee equal to 1.5% of the fundraising size.
Assuming the company raises Rmb10.5bn,
the fee is Rmb157.5m.
Excluding the strategic tranche, about
80% and 20% of the remaining shares will
be earmarked for institutional and retail
investors, respectively.
Proceeds will be used for intelligent
technology research, the construction of an
intelligent technology manufacturing base
in the city of Changsha, IT services, and to
replenish working capital.
CICC is the sponsor of the deal and also
joint bookrunner with Goldman Sachs Gao
Hua Securities, Citic Securities, BOC International
(China), Morgan Stanley Huaxin Securities and
TF Securities.› FEIHE FILES AGAIN FOR HONG KONG IPOBaby-formula maker CHINA FEIHE, which
delisted from the US in 2013, has filed a
listing application to the Stock Exchange of
Hong Kong for an IPO of at least US$1bn.