China Renaissance Seeks Up to $377M In Hong Kong IPO

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China Renaissance Holdings Ltd., the Chinese investment bank advising some of the most high-profile technology mergers and acquisitions in the country, seeks to raise up to HK$2.96 billion (US$377 million) through a Hong Kong initial public offering.

The Beijing-based investment bank is offering 85 million shares at HK$31.8 (US$27.7) to HK$34.8 (US$30.3) apiece, said people with direct information of the deal. The company initially sought to raise up to US$800 million.

China Renaissance has secured US$125 million from three cornerstone investors. The Asian alternative investment manager Snow Lake Funds and Ant Financial, a digital payments company backed by billionaire Jack Ma, have each committed to buy about US$50 million. LGT Group Foundation, a European private wealth and asset management firm, will invest US$25 million.

Ant Financial’s investment is purely a fiscal investment without any strings attached, said Xiang Wei, managing director of China Renaissance at the company’s global offering press release on September 13.

"In the future, China Renaissance will seek potential opportunities to work with Ant Financial in wealth management, online securities business, and other areas," said Xiang.

Founded in 2005 by former Morgan Stanley banker Bao Fan, China Renaissance is an early investor in a number of Chinese technology giants. With a focus on new-economy deals, the boutique investment has advised on high-profile mergers and acquisitions by Chinese technology companies. Among them are ride-sharing conglomerate Didi and Kuaidi, restaurant review and delivery titan Meituan and Dazhong Dianping, and the acquisition of bicycle-sharing system Mobike by Meituan.

China Renaissance’s preliminary prospectus shows that its adjusted net profit five-folded in the first quarter of 2018 compared to the same period last year, reaching US$35.67 million. The increase is contributed by the company’s growth in investment banking and investment management businesses.

China Renaissance plans to price the offering on September 20 and debut on Hong Kong’s main board on September 27. The company plans to use 40% of the proceeds to expand its investment banking operations, 20% to develop its wealth management business. Another 20% will go towards its investment management unit. And the rest part will be used for technology infrastructure spending and general corporate purposes.

Goldman Sachs Group Inc. and ICBC International Holdings Ltd. are joint sponsors of the offering. China Renaissance is acting as sole financial adviser, said its prospectus.


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