Bicycle- rental operator Youon raises $ 87m

Changzhou Youon Public Bicycle System, a bike rental company, held an IPO on the Shanghai Stock Exchange on Thursday, raising 581 million yuan ($ 87 million) and becoming the first listed company in the sector, thepaper. cn reported Thursday.

The shares immediately rose to 38.66 yuan, a gain of 44 percent, the limit for first- day trading in China.

Youon’s first- half revenue was 474 million yuan, up 43.5 percent year- on- year, with net profit of 61.36 million yuan, up 21 percent, according to the company’s interim statement released Wednesday.

Unlike other bike- sharing platforms such as Mobike and Ofo whose main business model is for short- term hires, Youon, based in East China’s Jiangsu Province, focuses more on public bicycles, including sales and operation.

According to the prospectus the company posted on August 4, revenue of its bike- leasing business only accounted for 0.12 percent in 2016.

The IPO proceeds will be used to establish a technology research center, support the operations of public bicycle projects and repay bank loans, the company said in the prospectus.

In March, Youon said that it would raise capital from Ant Financial, IDG Capital and Shen- zhen Capital Group Co, but the deal was later scrapped as investors cited uncertainty over the sustainability of the bike- sharing boom, media reports said.

Founded in 2010, Youon was initially engaged in research, development, sales and operation of public bicycles invested by the local government.

The Shanghai IPO was the company’s second attempt. Its first attempt failed in June 2015 when the A- share market plummeted.

It won approval from the China Securities Regulatory Commission in April this year for the IPO.