NetEase Unit Will Test Appetite for Chinese IPOs in U.S.

Julia Cristina Silvi Fioretti

26 Oct 2019, 01:42 AM IST

(Bloomberg) -- NetEase Inc.’s online education arm, Youdao Inc., begins trading on the New York Stock Exchange on Friday in what is set to be a test of appetite for U.S. initial public offerings by Chinese companies after poor performance this year.

Youdao priced its IPO at $17 a share, people familiar with the matter said. It’s the first Chinese listing in the U.S. since 9F Inc. raised $85 million and started trading in mid-August, according to data compiled by Bloomberg.

U.S. listings by Chinese companies have fared poorly this year, declining 25% on average, the data show. Moreover, fewer of them have opted to go public on American exchanges, with 22 Chinese firms raising $2.78 billion so far this year, a 64% drop from the same period last year.

NetEase Unit Will Test Appetite for Chinese IPOs in U.S.

The ongoing U.S.-China trade war and worries over technology companies have added to political uncertainty surrounding such deals. The Trump administration is considering delisting Chinese companies from his nation’s exchanges and reducing U.S. portfolio flows into China, Bloomberg News has reported.

The largest U.S. IPO by a Chinese company, DouYu International Holdings Ltd., which raised $775 million, has slumped 33% from its offer price. However, the second-biggest such deal by Starbucks challenger Luckin Coffee Inc. has jumped 26% from its IPO price, data compiled by Bloomberg show.

UPCOMING LISTINGS:

Chongqing Rural Commercial Bank
- Size $1.5b
- Shanghai stock exchange
- Took orders Oct. 14; listing date TBA
- CICC, China Securities
ESR Cayman Ltd.
- Hong Kong stock exchange
- Size $1.6b
- Listing Nov. 1
- CLSA, Deutsche Bank, Morgan Stanley
Hanwha Systems
- Korea exchange
- Size up to $390m
- Pricing Oct. 31; listing Nov. 14
- Citi, Korea Investment & Securities, NH Investment
S Hotels and Resorts
- Thailand exchange
- Size up to $249m
- Pricing Oct. 25; listing Nov. 12
- Credit Suisse
Ascentage Pharma Group International
- Hong Kong stock exchange
- Size $53m
- Listing Oct. 28
- BAML, Citi
JS Global Lifestyle Co.
- Hong Kong stock exchange
- Size up to $464m
- Pricing Oct. 25; listing Oct. 31
- Credit Suisse, ICBC International, Morgan Stanley
Bangkok Commercial Asset Management
- Thailand stock exchange
- Size at least $700m
- Listing date TBA
- Trinity Securities, Kasikorn Securities
Lotte REIT
- Korea stock exchange
- Size $353m
- Listing date Oct. 30
- HSBC, Korea Investment & Securities, Nomura
CMGE Technology Group
- Hong Kong exchange
- Size up to $166m
- Pricing Oct. 24; listing Oct. 31
- BNP, CICC
China Feihe
- Hong Kong stock exchange
- Size about $1b
- JPMorgan, CMS, CCB International

More ECM situations we are following:

The new co-chief executive officers of Indonesia’s largest internet startup plan to take the company public, raising capital to support drives into key areas like financial services and food delivery.
Myanmar’s stunted stock exchange expects as many as four IPOs in coming months, in part because the prospect of equity trading by foreigners has stirred interest in listings.
ESR Cayman Ltd., a logistics real estate developer, is set to raise $1.6 billion as it’s planning to price its IPO at the middle of a marketed range, people familiar with the matter said.
Citigroup Inc. and ICICI Securities Ltd. are among banks selected for UTI Asset Management Co.’s planned IPO in Mumbai, according to people familiar with the matter.