July 16, 2018 / 6:25 PM / a month ago

Chinese online group Pinduoduo targets up to $1.63 bln in U.S. IPO

July 16 (Reuters) - Chinese online group discounter Pinduoduo is planning to raise up to $1.63 billion from a U.S. listing, its latest filing with the U.S. Securities and Exchange showed, in what will be one of the biggest U.S. float by Chinese firms in four years.

Pinduoduo, owned by Walnut Street Group, plans to sell about 85.6 million American Depositary Shares in its initial public offering (IPO) at a price range of $16 to $19 each, according to its filing, which was uploaded to the exchange website on Monday.

The company, backed by Chinese internet giant Tencent Holdings, will open the book to institutional investors on Tuesday and price its IPO next Wednesday, said two people close to the transaction.

Pinduoduo expects to list on the Nasdaq under the symbol “PDD.”

The company is the latest in a series of Chinese tech groups flocking to list in New York or Hong Kong, seeking to replenish its coffers amid the fierce competition with domestic rivals, notably e-commerce giants Alibaba and JD.com, even as trade tensions between China and the United States rattle global markets.

China’s Meituan Dianping, an online food delivery-to-ticketing services platform which rivals Alibaba-backed food-delivery peer Ele.me, is also looking to launch its IPO of over $4 billion in Hong Kong in coming months.

Loss-making Pinduoduo, set up by former Google engineer Colin Huang in 2015, also counts Sequoia Capital China as a major investor.

In an initial filing, the company, which allows consumers to group together to increase the discounts offered by merchants, claimed 103 million active users of its mobile platform as of the end of March.

The Shanghai-based firm was valued at $15 billion in an April fundraising round and was looking to double that, Thomson Reuters publication IFR has reported.

Thanks to its low-priced products and larger user base in China’s smaller cities, the company’s gross merchandise volume exceeded 100 billion yuan last year, a milestone for Chinese e-commerce firms that took Alibaba’s Taobao marketplace five years and JD.com 10 years to reach.

Pinduoduo’s revenues have grown sharply, reaching 1.38 billion yuan ($206.4 million) in the first quarter of 2018 from 37 million yuan a year ago. Net losses, however, remained broadly steady at 201 million yuan.

CICC, Credit Suisse, Goldman Sachs and China Renaissance are advising Pinduoduo, according to the filing. ($1 = 6.69 yuan) (Reporting by Julie Zhu in Hong Kong and Nikhil Subba in Bengaluru; Editing by Maju Samuel)

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