Just one IPO priced this past week, as the annual August break rolls on.
The big news came from NIO (NIO), the "Tesla of China" which filed to raise $1.8 billion in a US IPO. It was joined by three other Chinese companies preparing to go public in the fall: CooTek (CTK), 111 (YI) and MDJM (MDJH). These filings came despite recently poor returns out of China; aftermarket returns from the last five ADR offerings average -34%. Another large filing came from US pipe maker Zekelman (ZEK), and more US companies should join the pipeline in the coming week.
| 1 IPO and 1 SPAC During the Week of August 13th, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 08/17 |
| TKK Symphony Acquisition (TKKSU) | $220M | $272M | 0% | +0% | +0% |
| Blank check company formed to acquire a consumer products business in China. | |||||
| Aridis Pharmaceuticals (ARDS) | $26M | $103M | -7% | +0% | -1% |
| Developing immunotherapies for antibiotic-resistant infections. | |||||
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Immunotherapy biotech Aridis Pharmaceuticals (ARDS) raised $26 million at a valuation of $103 million. However this "IPO" looked more like a private placement: Insiders bought 88% of the deal, leaving just $3 million for new investors. It priced at the low end and traded down 1%. Owned by founders and Chinese VCs, Aridis may have struggled in light of bad news from the clinic of its closest peer Arsanis (ASNS).
A Hong Kong-based blank check company, TKK Symphony Acquisition (TKKSU), also raised $220 million this week. 2018 SPAC offerings are on pace to surpass 2017, itself a 10-year record.
US IPO Pipeline Update: Zekelman files, and NIO leads a Chinese wave
| 9 Filings During the Week of August 13th, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Entasis Therapeutics (ETTX) | $86M | Health Care | Credit Suisse |
| Clinical-stage biotech developing therapies for multi-drug resistant bacteria. | |||
| Principia Biopharma (PRNB) | $86M | Health Care | BofA ML |
| Developing oral small molecule therapies in the areas of oncology and immunology. | |||
| Qutoutiao (QTT) | $300M | Technology | Citi |
| Chinese news and video aggregation app that provides custom feeds. | |||
| Zekelman Industries (ZEK) | $1,000M | Energy | Goldman |
| Largest independent US steel pipe and tube manufacturer. | |||
| CooTek (CTK) | $100M | Technology | Credit Suisse |
| Chinese provider of mobile keyboard software. | |||
| 111 (YI) | $200M | Technology | JP Morgan |
| Runs an online retail drugstore and healthcare platform in China. | |||
| nFüsz (FUSZ) | $20M | Technology | Allianz Securities |
| Provides video-based customer relationship management software for businesses. | |||
| MDJM (MDJH) | $8M | Real Estate | Network 1 |
| Integrated real estate services company in China. | |||
| NIO (NIO) | $1,800M | Consumer Discretionary | Morgan Stanley |
| China-based producer of high-performing electric vehicles. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 7% year-to-date, while the S&P 500 is up 8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Athene (ATH). The Renaissance International IPO Index is down 9% year-to-date, while the ACWX is down 5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Delivery Hero and Siemens Healthineers.
