China Digest: Mogu trims US IPO target; Tongcheng-Elong gains 26% in HK debut

Visual from Mogu's IPO document.

Online fashion and cosmetics startup Mogu Inc and online Chinese travel firm Tongcheng-Elong, both backed by Internet giant Tencent, have recently made news, with Mogu cutting its US IPO target and Tongcheng-Elong gaining double-digit on its Hong Kong debut.

Mogu scales back US IPO target to $87.4m

Mogu Inc, a Tencent-backed Chinese startup selling fashion and cosmetics online, has scaled back its US IPO target to $87.4 million following the planned reduction of its valuation to $2 billion, according to its amended SEC filing.

The company is offering 4.750 million American depositary shares (ADS), with each ADS representing 25 Class A ordinary shares. The IPO price per ADS will be between $14 and $16.

Mogu filed for an IPO earlier this month with an offering size of $200 million, a placeholder amount used to calculate fees.

Mogu is pressing ahead even though the IPO could mark a significant discount from the $3 billion the company said it was valued at when rivals Meilishuo and Mogujie merged in 2016. The company boasts 62.6 million monthly active users on mobile and generated Rmb16.3 billion ($2.3 billion) in transactions in the year ended September, according to its filing.

Chinese travel firm Tongcheng-Elong gains 26% on debut

Tongcheng-Elong, another Tencent-backed online Chinese travel firm, gained 26 per cent on its Hong Kong trading debut Monday, following a HK$1.62-billion ($207 million) offering.

The company, which is also backed by travel website Ctrip.com International, saw its stock trading at HK$10.78 during the opening bell at the Hong Kong Stock Exchange and ended at HK$12.40. Tongcheng-Elong sold 165.4 million shares in the offering.

The company had earlier been seeking to raise up to $1 billion, but weak markets and a slide in Ctrip’s share price forced it to slash the size of the IPO.

Tongcheng plans to use the proceeds of the IPO to enhance products and service offerings as well as to fund potential acquisitions and investments. The company made a profit of Rmb194 million ($27.86 million) in 2017, compared to a loss of Rmb2.16 billion in 2016, according to its prospectus.

Also Read:

Tencent-backed Mogu said to halve US IPO valuation target

Tencent-backed Chinese travel site Tongcheng raises $180m in HK IPO

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.