Chinese online retailer raises $78.9 million from US IPO

LightInTheBox becomes the first Chinese company to list in the US since November last year. The stock jumps more than 17% at the start of trading.
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LightInTheBox is a global online retailer based in Beijing 
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<div style="text-align: left;"> LightInTheBox is a global online retailer based in Beijing </div>

LightInTheBox Holding, a Beijing-based online retail company, has raised $78.9 million from its initial public offering on the New York Stock Exchange after fixing the price at the mid-point of the indicative range.

The stock opened 17.5% above the IPO price when it started trading last night and climbed more than 30% in early trading.

This is the first new listing by a Chinese company in the US since the IPO of YY, a video-based Chinese social network, in November last year, according to Dealogic. YY raised $81.9 million from its offering, after it was able to overcome the negative sentiment resulting from a series of accounting scandals that had damaged the reputation of Chinese companies in the US market. The only other Chinese company to list in the US last year was online discount retailer Vipshop Holdings, which raised $72 million from its IPO in March.

While global stock markets remain extremely volatile, these two stocks have performed strongly since their respective trading debuts, which is an encouraging sign for the newcomer. On Wednesday, Nasdaq-listed YY closed at $27.34, which is 160% above its IPO price of $10.50. NYSE-listed Vipshop finished at $28.61, more than four times its offer price of $6.50.

Through the IPO, LightInTheBox sold 17% of the company in the form of 8.3 million American depositary shares (ADSs) at $9.50 each. The deal was “heavily” oversubscribed when the order books closed at the end of US trading on Wednesday, a source says.

The ADSs were marketed at a price between $8.50 and $10.50 for a potential deal size between $70.6 million and $87.2 million. The 8.3 million ADSs represent 16.6 million ordinary shares. The deal also comes with a greenshoe option of up to 15%, which could increase the total proceeds to $90.7 million.

The price range represented a 2014 price-to-earnings ratio of between 11.8 times and 14.5 times, and the final price translated into a P/E multiple of 13.2 times, according to the source.

Its main comparable, Vipshop, is trading at a 2014 P/E ratio of around 18.2 times, Bloomberg data show.

LightInTheBox is a global online retailer that delivers a wide selection of lifestyle products directly to consumers around the world. Its major markets are Europe and North America, and it uses global online marketing platforms such as Google and Facebook to reach its customers, according to the company’s preliminary prospectus.

Credit Suisse and Stifel were joint bookrunners for the IPO.

In Hong Kong
Since Hong Kong’s first billion-dollar-plus IPOs this year were successfully completed last month, a number of smaller deals have hit the market, including Wuzhou International Holdings and China Harmony Auto. The two Chinese companies closed the order books for their respective IPOs on Wednesday, but as of last night, there weren’t much information available about the outcome of these deals.

Global stock markets have logged sharp losses in recent weeks, which is keeping investors on their toes. The Hang Seng Index fell 1.1% yesterday and is now down 3.6% year-to-date.

Wuzhou International, a Chinese property developer, is expected to fix its offer price at HK$1.22 after attracting mostly friends and family-type investors, one source said. That is near the bottom of the range and will see the company raise HK$1.39 billion ($179 million).

Wuzhou International offered 1.14 billion new shares at a price between HK$1.15 and HK$1.50, which put the potential deal size at about $169 million to $220 million.

According to a term sheet, the company plans to use 60% of the proceeds to finance land acquisition and construction and development of 16 projects for which it has already signed a memorandum of understanding. The rest will be used finance construction and development for projects with no current MOU, as well as for working capital and other general corporate purposes.

Bocom International and Macquarie are joint global coordinators for the deal. They are joined as bookrunners by First Shanghai and GF Securities.

China Harmony, a car dealership group that focuses exclusively on luxury vehicles in China, is seeking to raise between $215 million to $315 million from its offering, but no information on the final pricing was available last night.

The company had signed up Anhui Investment Group as a cornerstone investor. According to the term sheet, it has promised to invest $50 million and is subject to a six-month lock-up.

China Harmony offers 10 luxury and ultra-luxury brands, namely BMW, Lexus, Rolls-Royce, Mini, Land Rover, Jaguar, Aston Martin, Audi, Ferrari and Maserati, according to the draft prospectus. The company is headquartered in Henan Province and all of its outlets were located in this province until November 2011, when it opened a BMW 4S store in Beijing. At present, 17 of its 25 outlets are located in Henan.

Goldman Sachs is the sole global coordinator for the IPO, as well as a joint sponsor and bookrunner together with CICC.

Aside from these two deals, Hopewell Hong Kong Properties is currently on the road with an offering of up to $780 million. It is a spin-off of Hopewell Holdings’ entire property portfolio in Hong Kong. The institutional bookbuilding is due to close on June 11, and the trading debut is scheduled for June 19.

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