Ouyeel, a business-to-business (B2B) steel e-commerce platform launched by state-owned iron and steel producer China Baowu Steel Group, has moved towards an initial public offering (IPO) on the mainland A-share market.
The company, which competes with VC-backed domestic counterpart Zhaogang.com, entered into a pre-listing tutoring agreement with Chinese investment bank CITIC Securities on July 24 and filed the development with the country’s securities regulator China Securities Regulatory Commission (CSRC) on July 28, according to an update on the CSRC website yesterday.
Ouyeel is still in the early phase of the IPO process, which will be followed by procedures including due diligence, submission of the prospectus, reviews and approval from the regulator, and pricing that could take several months on the A-share market depending on its targeted IPO location. The firm has yet to decide on the listing board and IPO offering size.
Founded in February 2015 and named after Ou Yezi, a legendary sword-making master in ancient China, Ouyeel operates as an online platform that enables online trading of steel products among corporate clients.
Powered by the Internet of Things (IoT), big data, and mobile Internet, the platform recorded an annual online transaction volume of 230 million tones (230 billion kilograms) of steel in 2019, up 95 per cent compared to one year earlier, shows the company website.
Ouyeel had a series of mixed-ownership reforms before it kicked off the IPO preparation work.
The company raised about 2.02 billion yuan ($290 million) in a round of equity financing from eight investors in June 2019. These investors included China Merchants Venture, an investment unit of state-owned conglomerate China Merchants Group, Beijing-based CCB Investment Funds Management, among others.
In May 2017, its initial equity investment of 1.05 billion yuan ($151 million) was completed with capital injections from investors including Singapore-based logistics major and real estate fund manager GLP.
Ouyeel’s major competitor Zhaogang.com, which is backed by top-notch investors like Sequoia Capital China and IDG Capital, filed an IPO prospectus with the Hong Kong Stock Exchange (HKEX) in June 2018. But the company scrapped the listing plan in May 2019 due to unspecified reasons.