Tencent-backed app to seek IPO that values it at US$4bil
HONG KONG: Yet another Chinese technology company is headed for an initial public offering.
Meilishuo, the online fashion retailer backed by Tencent Holdings Ltd, is in talks with several investment banks about a US initial public offering that could value the startup at about US$4bil, according to people familiar with the matter.
The women-focused online retailer hosted a bake-off to discuss IPO prospects with potential advisors and underwriters, the people said, asking not to be identified talking about private negotiations.
Meilishuo, which merged with rival Mogujie in 2016 to form a company with US$3bil in sales, was said to have been valued at US$3bil at the time of that deal.
The company, whose name means “Beauty Talk,” is one of the more popular fashion and cosmetics retailers online, a niche it’s clung to despite the dominance of Alibaba Group Holding Ltd and JD.com Inc. Meilishuo’s envisioned US$4bil valuation is an initial target and could change if a deal proceeds, the people said.
It’s one in a growing wave of Chinese technology companies looking to sell shares to the public.
Smartphone maker Xiaomi Corp is seeking a valuation of as much as US$100bil in a much-anticipated offering, people familiar with the matter have said, while Meituan Dianping, a Chinese food review and delivery giant also backed by Tencent, has begun discussions about a Hong Kong IPO at a valua- tion of at least US$60bil.
“Tencent wants to develop e-commerce via its partners, so Meilishuo could get a lot of resources and help,” said Li Yujie, an analyst with RHB Research Institute Sdn in Hong Kong.
“It still depends on how the overall market performs, but e-commerce sector-wise it would be a good year to fetch a good valuation.”
Meilishuo, which didn’t respond to requests for comment, was said to have considered a US listing as early as two years ago.
Most of China’s largest tech corporations have picked New York for their debuts, seeking the wide investor base and higher international profile that an American listing confers.
Beijing however is now encouraging many of those same firms to also list shares on Chinese exchanges.
Founded in 2009, Meilishuo runs an online marketplace selling clothes, shoes and handbags. — Bloomberg