China startup Mogu poised to raise US$67mil in NYSE IPO

HONG KONG: Mogu Inc, a Chinese startup selling fashion and cosmetics online, is poised to raise US$67mil in a US initial public offering (IPO) priced at the bottom of its marketed range, sources said.

The company, which counts Tencent Holdings Ltd as an investor, plans to price its sale of 4.75 million American depositary shares at US$14 each, the sources said. The shares were marketed at US$14 to US$16 apiece.

The price implies a market value of US$1.3bil, compared to the US$4bil the Chinese firm was targeting earlier this year before a market selloff hit demand for tech stocks.

When Meilishuo.com and Mogujie.com merged in 2016 to create Mogu, the combined company said it was valued at US$3bil.

Mogu lost US$44mil on revenue of US$71mil for the six months ended Sept 30, a regulatory filing shows. A representative for Mogu didn’t immediately respond to a request for comment.

The IPO marks the latest in a string of debuts this year by companies backed or controlled by Tencent, including Hong Kongtraded Internet services giant Meituan Dianping and New Yorklisted electric vehicle maker NIO Inc.

On Monday, Tencent’s music-streaming arm said it would market its US IPO shares at US$13 to US$15 each, which would raise as much as US$1.23bil.

Morgan Stanley, Credit Suisse Group AG and China Renaissance Holdings Ltd are arranging Mogu’s listing. Its shares are expected to begin trading on the New York Stock Exchange under the symbol MOGU. — Bloomberg