Chinese Property Software Company Ming Yuan Cloud Seeks $800 Mln in Hong Kong IPO

UTC by Steve Muchoki · 3 min read
Chinese Property Software Company Ming Yuan Cloud Seeks $800 Mln in Hong Kong IPO
Photo: Depositphotos

Ming Yuan Cloud Group Holdings Ltd is going to sell up to 374 million shares at a range of HK$15 to HK$16.50 through a Hong Kong IPO.

Chinese property software company Ming Yuan Cloud Group Holdings Ltd on Monday launched an IPO in Hong Kong seeking to raise up to US $797 million. However, the Ming Yuan shares will start trading on the Hong Kong Stock Exchange on September 25. According to the deal term sheet, the company anticipates to sell up to 374 million shares at a range of HK$15 to HK$16.50 each. Consequently raising its value to be between $3.62 billion and $3.98 billion.

Notably, the anticipated IPO has attracted several high-end investors willing to pull their capital together. This list includes Hillhouse set to acquire around $86 million worth of stock, Singapore’s GIC and China Structural Reform Fund who have put $50 million aside each.

In addition, according to the deal term sheet, Private equity fund Sequoia, BlackRock and Fidelity International will each take $30 million worth of shares.

Ming Yuan IPO and the Bigger Picture

There is a notable dramatic shift of Chinese tech IPOs away from United States-based stock exchanges to Chinese ones. It all culminated with the increased hostility between the two countries, the U.S.-China trade war.

Cloud business is booming amid increased demand during the coronavirus pandemic. This is highly motivated by the fact that most people are now working from home in remote operations. With the increased sales pressure in most global stock indexes, investors are seeking opportunities away from risky markets to get some profits. Therefore, general tech companies, and health-based companies’ stocks are seeing increased demand as the global market recovers from the crisis.

There are other notable listings planned for in this week, among them ZTO Express ZTO.N passed its Hong Kong listing committee hearing last week, according to documents lodged with the exchange, whereby it anticipates to raise up to $2 billion. Also in the list there is the Chinese hotel chain Huazhu HTHT.O which is currently raising nearly $900 million through a secondary listing. During the pandemic, notable companies have opted to raise extra capital in China through public listings. In June, 2020, and Netease managed to raise approximately $7.5 billion.

Although part of the raised capital will assist the company cushion its operations through the pandemic, the raised capital will largely see the companies shift their gears to meet the new global standards. Competition in the tech realm is set to increase further and the services are likely to get cheaper for the customers. Although it might be difficult ahead for upcoming companies to thrive under immense pressure, perhaps the global market recovery will be much stronger and sooner than anticipated.

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