Online retailer JD.com will kick off its roadshow on Monday and is seeking to raise as much as $1.69 billion in a Nasdaq listing later this month.
China's second largest e-commerce company after Alibaba Group aims to price some 93.7 million American Depository Receipts between $16 and $18 each.
Of the ADRs on offer, 74% will be primary while the remaining 26% is made up of selling shareholders, which includes hedge fund firm Tiger Global Management, DST Global Funds, and JD.com chairman and CEO Richard Liu.
An exercised greenshoe option will tack on an additional 14 million ADRs. Bank of America Merrill Lynch, Barclays, UBS, Jefferies, Allen & Company and China Renaissance are leading the deal.
The roadshow begins in Hong Kong, and will take the company to New York, Boston, San Francisco, Kansas City and Chicago over the next two weeks.
Shares will price on May 21. The indicative price range could value JD.com - formerly known as 360Buy - at $25 billion.
A slew of Chinese technology and internet companies - buoyed by strong performance and a renewed confidence by US investors seeking to buy into the Chinese internet retail story - sought to tap public markets in the first half of the year.
China’s online retail market was worth Rmb1.3 trillion (US$212 billion) in 2012 and is forecast to reach Rmb3.6 trillion in 2016, representing a compound annual growth rate of 28.9%, according to internet research company iResearch.
There are 1.35 billion people living in China, yet only 618 million use the internet, 500 million through their mobile phones. The real potential lies with online shopping – at the moment only 302 million Chinese use the internet for shopping, according to the China Internet Network Information Center.
Interest waning
But interest in Chinese stocks has waned on the back of poor earnings results and weaker-than-expected manufacturing data. After peaking at $58.32 a share in early March, shares in Chinese internet company 58.com have plummeted 37%, closing on May 9 at $36.92.
Similarly, AutoHome, another mainland internet company that listed in the US last year, hit a 2014 high on March 5 of $51.76. Since then, shares have dropped 43% up to May 9.
The sell-off in tech stocks has led investors and analysts to re-evaluate valuations for technology companies, which are very high - 58.com is trading at a forward 2014 p/e of 60.52 times while AutoHome is valued at 29.01 times forward earnings, according to Bloomberg. US tech companies also have soaring valuations.
Amazon is trading at a forward p/e of 85.10 times, while Twitter is valued at 821.79 times forward earnings.
Piggy-back on Alibaba
JD.com's roadshow starts days after Alibaba Group unveiled details of its own juggernaut US public offering, which could raise as much as $20 billion and break a number of records.
With valuations ranging anywhere from $150 billion to $250 billion, the e-commerce giant would dwarf its US counterparts. Alibaba has placed a fair value on its shares between $40 and $50 per unit, according to the filing.
Last week's also shed more light on the unconventional shareholder structure, which will allow Jack Ma and his "Alibaba Partnership", consisting of 28 members, to nominate a simple majority of the board even though the founder's stake is less than 10%.
This was a deal breaker for Hong Kong, as the city's exchange prohibits dual-class share structures that give shareholders more than one vote per share. One thing is clear - all eyes will be on Alibaba. Analysts expect a host of other Chinese tech companies to follow in its footsteps and tap into public markets this year.
