Meitu’s Hong Kong IPO to value China photo app maker at up to $4.5 billion
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Chinese photo app and mobile phone maker Meitu Inc is set to launch an up to $735 million initial public offering in Hong Kong, IFR reported on Monday, citing people close to the deal. Meitu, better known for its apps that let users retouch and beautify selfies and other photos, is offering shares in an indicative range of HK$8.50 to HK$9.60 ($1.10-$1.24) each, added IFR, a Thomson Reuters publication. The IPO is slated to be priced on Dec 8.
Meitu did not immediately reply to a Reuters request for comment on the IPO terms. The deal will value Meitu, which counts venture capital investors Qiming Venture Partners, IDG-Accel China and Tiger Global among its backers, at up to $4.5 billion, IFR said.
The IPO will be a rare technology sector IPO in Hong Kong. Between one-quarter to one-third of the shares will be sold to cornerstone investors, IFR said. That would be much lower than some of the large new listings in the city, including the $7.6 billion IPO of Postal Savings Bank of China (PSBC) in September that had 77 percent of its deal bought by cornerstones.
Large investments by cornerstone investors hurt liquidity for IPOs once the shares start trading, as the stock is locked up for a minimum of six months. The cornerstone money can also pressure the stock as the expiration of the lock-up period nears. China Merchants Securities, Credit Suisse and Morgan Stanley were hired as sponsors of the IPO.
Questions & Answers
Q.What is Meitu Inc. Best known for doing?
What is Meitu Inc. Best known for doing?
Meitu Inc. Is primarily known for its mobile applications that allow users to retouch and enhance selfies and other photographs. It is also a Chinese mobile phone maker.
Q.How much could Meitu’s IPO potentially raise?
How much could Meitu’s IPO potentially raise?
Meitu's initial public offering is set to raise up to $735 million. The indicative share price range is HK$8.50 to HK$9.60, or $1.10 to $1.24 per share.
Q.Which banks have been hired to sponsor the IPO?
Which banks have been hired to sponsor the IPO?
China Merchants Securities, Credit Suisse, and Morgan Stanley have been appointed as the sponsors for Meitu's initial public offering in Hong Kong. They are managing the deal.
Q.Why could large cornerstone investor involvement be a concern for IPOs?
Why could large cornerstone investor involvement be a concern for IPOs?
Large investments from cornerstone investors can negatively impact an IPO's liquidity once shares begin trading, as the stock is locked up for at least six months. This can also pressure the stock as the lock-up expiry nears.
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