Tencent-backed Weimob surges 14% on Hong Kong debut

Shares of the company, which were priced at HK$2.80 apiece in the IPO, surged to HK$3.20 in morning trading on January 15 before falling back to HK$2.94 by midday. The company sold 317.6 million shares in the offering, 45.3 million above its official allocation, according to a prospectus.

Launched in 2013, Weimob creates software to help small and medium-sized enterprises (SMEs) build their online presence, primarily through Tencent’s Wechat platform. Merchants use the products, which are available on a software-as-a-service (SaaS) basis, to build personalized storefronts and manage their digital commerce operations including product display, order and payment processing, customer relationship management, and social media outreach.

For the year ended December 2017, Weimob reported RMB534 million ($78 million) in revenue, up from RMB189 million the year before. Over the same period, the company went from a net loss of RMB80.9 million to a net profit of RMB2.6 million.

In addition to Tencent, the company counts SIG, Crescent Capital, and Singapore’s sovereign wealth fund GIC Private as investors. Tencent held 3.43% stake in the company prior to the offering through its unit Tencent Mobility, while SIG, Crescent and GIC held 2.17%, 8.33%, 8.33%, respectively.

China’s Meridian Capital was also an early investor in Weimob, along with Tencent Mobility. The investors committed two funding rounds in 2015 totaling more than RMB650 million. In a pre-IPO round in 2018 Weimob raised more than $321 million from a consortium including UOB Venture Management, SIG, GIC, and a number of other investors.

The company is one of a host of new economy businesses - most of which are focused on artificial intelligence, big data, and internet-enabled technologies - that have flocked to list in Hong Kong in 2018 after the city’s regulator loosened rules on these companies’ listing.

However, the post-IPO performance of many of these companies has been disappointing. Contributing factors include a general weakness in the markets, uncertainty over loss-making business models, and underwhelming earnings. Meituan Dianping, for instance, has dropped 39% since its debut in September, while smartphone maker Xiaomi has shed 40% since its listing in July.

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• Topics
• Greater China
• IPO
• Consumer
• China
• TMT
• Tencent
• GIC Private
• IPO
• Hong Kong (China)