China's Baozun gains on US debut after smaller-than-expected IPO

The company raised $110 million in its public offering, selling 11 million shares at $10.00 apiece. It was targeting a price of $12.00-14.00 but expectations were lowered due to concerns among investors about the high valuation.

The stock opened at $10.25, but dropped early on, reaching as low as $9.23 in the first hour. Shares bounced back later in the day and reached a high of $10.89 before closing at $10.45.

Baozun helps its clients, which include Philips, Nike and Microsoft, to design and operate their e-commerce platforms. Its services include IT infrastructure, customer service, digital marketing and warehousing. The company will use the proceeds from the IPO to improve its sales and marketing, invest in R&D, and expand its warehouse and delivery infrastructure.

Alibaba is Baozun's largest shareholder with an 18.2% stake, diluted from 23.5% prior to the IPO. Other backers include Crescent Group, SoftBank and Goldman Sachs.

The company received RMB32.7 million ($5.3 million) in 2009 and 2010 from Hangzhou Ali Venture Investment, the VC firm owned by Alibaba founders Jack Ma and Simon Xie. Crescent and New Access Capital invested RMB119.1 million in 2011; Hangzhou Ali committed an additional RMB12.9 million.

Then in 2012, Goldman Sachs joined Infinity Group and the three existing investors to invest RMB266.2 million. SoftBank committed $23.9 million in 2014.

Baozun reported net losses of RMB37.8 million in 2013 and RMB 59.8 million in 2014, while revenue increased from RMB268.5 million in 2013 to RMB477.2 million in 2014. The company has yet to earn a profit on an annual basis.

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• Topics
• Greater China
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• China
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