BNP Paribas and CLSA are joint sponsors.
The company posted profit of Rmb679m
(US$99m) for the three months ended March
31 2018, up 79% year on year. It posted profit
of Rmb1.89bn in 2017.
As of March 31 2018, it had 117 projects in
33 cities in China, with a focus on the Pearl
River delta and the Yangtze River delta.LAIX FILES FOR US IPOLAIX, which runs English teaching app
Liulishuo, has filed for an NYSE IPO of
US$100m.
Founded in 2013, LAIX teaches Chinese
students English via mobile apps, primarily
its flagship AI-powered “English Liulishuo”
app. As of June 30 2018, the company had83.8 million cumulative registered users in
China and globally.
The company made a net loss of Rmb182m
(US$27m) in the first half of 2018, up 171%
from 2017 year-on-year. Its net revenue was
Rmb232m in the first half of this year, up
480% from the same period of 2017.
Goldman Sachs and Morgan Stanley are the
bookrunners.
LAIX’s chief executive officer, Yi Wang,
currently owns 27.9% of the company, while
IDG Capital and Trustbridge Partners each
own 13.4%.
The company plans to use the funds
raised for research and development, selling
and marketing, general corporate purposes
and working capital, including strategic
investments and acquisitions.BOOKS COVERED FOR NIO’S NYSE IPOBooks for the up to US$1.32bn NYSE IPO of
electric vehicle start-up NIO have been covered,
according to people close to the deal.
The Tencent-backed company is selling
160m American depositary shares in an
indicative price range of US$6.25–$8.25 each.
The range gives a pre-money pre-greenshoe
market capitalisation of US$7bn–$9.2bn to the
company. It also represents a 2019 price-to-
sales ratio of 2.61–3.44.
Pricing is slated for September 11.
Goldman Sachs, JP Morgan and Morgan
Stanley are leading Nio’s float with Bank of
America Merrill Lynch, Credit Suisse, Citigroup,
Deutsche Bank and UBS.CITIC PE TRIMS LUYE PHARMA STAKECitic Private Equity has raised HK$788m
(US$100m) from the sale of part of its stake in
drug producer LUYE PHARMA through a block trade.
The Chinese PE fund, through its unit CPE
Greenery, sold 111m shares at HK$7.10 each
last Monday, representing a discount of 4.8%
to the HK$7.46 closing price.
Sole bookrunner UBS marketed the deal in
an indicative price range of HK$7.08–$7.20.
The books were well oversubscribed, with
the top five investors taking more than 70%
of the allocation.
There is a 30-day lock-up on the vendor.IPO FOR 111 COVERED IN FINAL DAYSOnline pharmacy and health service 111 has
achieved coverage for its up to US$149m
Nasdaq IPO. The float comprises 9.3m
primary American depositary shares with
guidance of US$14–$16 each, plus a 15%
greenshoe.
The range represents price-to-sales
multiples of 2.2–2.5 in 2019 and 1.2–1.4 in
2020, post-greenshoe. There is also an
indication of interest for up to US$20m of
the public float from existing shareholders.
The deal will be priced on September 11.
CICC, Citigroup and JP Morgan are the leads
on the float.INDIA
VECTUS PLANS OCTOBER IPO LAUNCHVECTUS INDUSTRIES is targeting the launch of its
Rs4.5bn (US$62m) IPO in October having
obtained regulatory approval, people with
knowledge of the transaction said.
The float will involve the sale of Rs850m
of primary shares and 3.9m secondary
shares. Founders Ashish Baheti and Atul
Ladha and investor Latinia are the vendors
of the secondary shares.84 International Financing Review September 8 2018Fosun unit eyes IPO
n INDIA Gland Pharma hires three banks for up to US$500m issue
GLAND PHARMA has moved one step closer to
offering Indian investors the novelty of the first
local listing from a Chinese-owned company.
Last week, the injectable drugs maker
majority-owned by Fosun Group hired Citigroup,
Haitong Securities and Kotak to manage an IPO
of up to US$500m. The launch is planned for the
first half of next year, people with knowledge of
the transaction said.
The primary and secondary share mix of the
IPO is not known, but company founders PVN
Raju and Ravi Penmetsa are likely to sell shares.
Fosun, which has been making high-profile
acquisitions in the past few years, bought a 74%
stake in the company last year for US$1.1bn
through Shanghai Fosun Pharmaceutical. It
bought the stake from KKR Floorline Investment
and the founders of Gland Pharma.
Fosun did not respond to an email seeking
comment on the offering.
Market participants are positive about the
IPO given the high growth and margins of the
injectables business. Gland Pharma, which was
founded in 1978, sources most of its revenue
from Europe and the US.
“The Gland IPO may get a good response
from investors, subject to reasonable pricing, as
the company has an injectables business and its
facilities have been approved by the US Food and
Drug Administration with no regulatory issues,”
said Shrikant Akolkar, senior analyst at broking
house IIFL Securities.
Akolkar pointed to profit margins in the
injectables business, which are around 30%
compared with an 18%–20% range in the oral
drugs sector.
Investors have done well by snapping up
shares in the IPOs of Indian pharmaceutical
companies in the past few years. AlkemLaboratories, Eris Lifesciences, Laurus Labs and
Syngene International are all trading above their
respective IPO prices.POLITICAL EXPOSURE
The planned deal comes at a time when activity
in the Indian IPO market has slowed compared
with last year, although the country is still one
of the most active issuance markets in Asia.
Thomson Reuters data indicate that as of
September 5, equity deals totalling US$15.5bn
were done in India, against US$28bn for the
whole of 2017.
Although the IPO is planned for early
next year, bankers away from the deal said
the company will wait for election-related
uncertainty to subside before the launch. India
is set for federal elections in May next year and
issuance activity is likely to slow in the run-up to
the vote.
Furthermore, some analysts say the deal
could be vulnerable to political tensions. Border
disputes between India and China have flared
up in the past, including a military stand-off last
year over the remote Doklam plateau, though
some noted that Fosun purchased its stake in
Gland Pharma when tensions were high.
“If Fosun can buy an Indian company at the
height of the Doklam crisis, then surely Gland
Pharma can sell an IPO,” a banker away from the
deal said.
Chinese investment banks have stepped
up their activities in India in recent years, with
Haitong Securities and CLSA being the most
active. Haitong managed the IPOs of HDFC
Standard Life and Central Depository Services
last year, and also mandated on the up to Rs15bn
(US$212m) IPO of Reliance General Insurance.
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