Xiamen-based Meitu seeks to list on Hong Kong bourse


Meitu, the developer of a Chinese mainland selfie app, is said to seek a hearing within this week with the Hong Kong Stock Exchange's listing committee that would set the stage for its initial public offering (IPO) next month.


The move marks almost the final step in a process expected to pave the way for the second-biggest tech listing in Hong Kong, triggered by a prospectus filed in August this year.


The Xiamen-based company, founded in 2008, is also a manufacturer of mobile phones and cameras. It is said to plan to raise between $500 million and $1 billion from its Hong Kong float, putting the tech firm on course to be valued at $5 billion, next only to online game developer Tencent, which went public at about $2 billion in Hong Kong back in 2004 and now is worth nearly $260 billion.


The company completed five rounds of venture financing over the past three years, raising as much as $500 million and pushing its value all the way up to $3.8 billion.


The monthly active users of Meitu reached 446 million as of June, up 81 percent year on year, according to its filing with the Hong Kong Stock Exchange. Compared with 800 million users of Tencent's messaging platform WeChat, 500 million of Instagram, and 280 million of China's Twitter-like Sina Weibo, Meitu is looking to further cash in on its user base.


Charles Ma, a Hong Kong-based consultant at one of the "Big Four" accounting firms, said Meitu's valuation remains relatively low, given that a potential US IPO could value the photo-sharing app Snapchat, with 150 million monthly active users and projected revenue up to $350 million, at a staggering $25 billion.


Last year, Meitu recorded revenue of $110 million. The company failed to make a profit over the past three fiscal years, with the accumulated adjusted net loss amounting to $180 million.


Adjusted net loss in the six months ended June 30 this year was $38 million, compared with $43 million in the same period last year.


Hannah Li Wai-han, a strategist at UOB Kay Hian (Hong Kong), said the company may still have a long way to go to tap the potential of its user base. So far, hardware sales, mainly smartphones, stand as its dominant source of revenue, accounting for 89.9 percent in 2015 and 95.1 percent in the first half of this year.


"This appears to be too high for an internet company," said Li.

[ Web editor:Wu Jianhan, Robin Wang    Source:chinadaily.com.cn ]