Tencent-backed China Literature raises $1.1b in Hong Kong IPO

Wu Wenhui, co-chief executive officer and executive director of China Literature Ltd., pauses during a news conference in Hong Kong, China, on Wednesday, Oct. 25, 2017. Photographer: Anthony Kwan/Bloomberg

An IPO for China Literature, Tencent Holdings’ online publishing arm, has raised $1.1 billion with the retail portion gathering demand that was 625 times the number of shares on offer, setting the stage for a sterling debut on Wednesday.

The offering for China‘s biggest e-book company priced at the top of its marketed range of HK$48–HK$55 range, Tencent said in a statement, confirming a report from Thomson Reuters IFR last week.

Tencent added that the international portion of the offering was “very significantly over-subscribed.”

“A hefty gain is expected, with the grey market price shooting as high as HK$77,” said Steven Leung, a sales director at UOB Kay Hian brokerage in Hong Kong. That represents a jump of about 40 percent over its IPO price.

China Literature is attractive as it has quite a sound business model and is a platform that is making money with a solid foundation. But still the valuation is way too high, in particular compared with its parent,” he said.

China Literature, which is 62 percent owned by Tencent, has a business akin to Amazon.com Inc’s Kindle Store, operating a platform with 9.6 million literary works from 6.4 million authors.

Private equity firm Carlyle Group LP owns 12.2 percent of China Literature while Trustbridge Partners, a private equity firm founded by Shujun Li, the former CFO of Shanda Interactive, holds 6 percent.

The listing comes some six weeks after the debut of ZhongAn Online Property & Casualty Insurance Co, which jumped 18 percent on its first day of trade and is now up almost 30 percent over its IPO price, boosting Hong Kong’s hopes of luring future Chinese technology start-ups.

Razer Inc, a gaming hardware maker backed by Intel Corp and Hong Kong billionaire Li Ka-shing, has priced its IPO near the top end of the range, raising HK$4.12 billion ($528 million), IFR reported on Tuesday.

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Tencent-backed China Literature said to raise $1.1b in Hong Kong IPO

Tencent unit China Literature launches up to $1.1b Hong Kong IPO

Reuters

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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.