(Yicai Global) Nov. 27 -- Babytree, which runs China's biggest online parenting community, gained 1 percent on its first day of trading in Hong Kong, valuing the company at about HKD11.5 billion (USD1.46 billion).
The stock [HKG:1761] ended at HKD6.87 (88 US cents), after earlier jumping as much as 5 percent. The Beijing-based company had priced the initial public offering at HKD6.80 a share. The benchmark Hang Seng Index was off 0.2 percent today.
Babytree expects to raise HKD1.6 billion (USD204.4 million) from the IPO, having scaled back from an initial USD1 billion target. Thirty percent of the proceeds will go to business expansion, 30 percent to research and development, 30 percent to future investments, acquisitions and strategic alliances, with the remainder assigned to daily operations, the company said in a statement.
Babytree listed a total 25 million shares on the Hong Kong Stock Exchange, or 10 percent of the global offering. It received 29.7 million subscriptions in Hong Kong, which is 118 percent of the number floated. The company allocated 225 million shares to investors, or 90 percent of the global offering.
E-commerce giant Alibaba Group Holding has ordered anti-dilution rights internally after the public offering, and subscribed to 24.8 million shares at the offer price, maintaining a 9.9 percent stake in Babytree through Taobao China Holding, the statement added.
The company's largest shareholder is now the family of founder Wang Huainan, which owns 22.2 percent. Fosun unit Startree is the second-largest shareholder with a 21.1 percent stake. TAL Education holds 8.7 percent.
Babytree had revenue of CNY200 million (USD28.8 million), CNY509 million and CNY729 million in the past three years, with annual losses of CNY286 million, CNY934 million, and CNY911 million. Its adjusted loss was CNY172 million in 2015, CNY44 million in 2016 and CNY138 million in 2017, per the IPO prospectus.
Editor: Bivash Mukherjee