Monday Tech Briefing: WuXi AppTec, Opera, Douyin

DEALS AND FUNDRAISING

1. WuXi AppTec to Issue H-Shares in Hong Kong

What: Chinese biotech firm WuXi AppTec Co. Ltd. announced Sunday that the company’s board of directors has unanimously approved its proposal to issue H-shares and list on the main board of the Hong Kong Stock Exchange. The number of shares the company plans to issue in Hong Kong will account for 10% to 15% of its total issued shares.

Why it’s important: WuXi AppTec listed in Shanghai in May, after it was fast-tracked by China’s securities regulator. Since then, the company’s market capitalization has more than doubled. Its shares now trade at 94.95 yuan ($14.33), compared with an initial public offering (IPO) price of 21.60 yuan.

Big Picture: WuXi AppTec is a unit of the formerly U.S.-listed WuXi PharmaTech, which privatized from New York because American investors didn’t have much interest in its stock. Its popularity in China shows the different taste Chinese investors have in companies, compared with American investors. (Source: Caixin, link in Chinese)

2. Browser Company Opera to Raise $115 Million in Nasdaq IPO

What: Norwegian web browser company Opera has submitted a prospectus for a $115 million Nasdaq IPO, Beijing Kunlun Tech Co., Ltd., a Chinese online gaming company, announced Sunday. Kunlun Tech’s chairman Zhou Yahui controls a 67.5% stake in Opera, which was acquired by several Chinese companies in 2016.

Why it’s important: An increasing number of Chinese tech companies are choosing to list either in Hong Kong or New York this year, including smartphone maker Xiaomi and on-demand service provider Meituan-Dianping. (Source: Company Announcement, link in Chinese)

3. Pinduoduo Files for $1 Billion U.S. IPO

What: Chinese e-commerce company Pinduoduo announced that it plans to raise at least $1 billion in a U.S. IPO. The company was founded just three years ago, but its active user base had already reached 245 million by the end of 2017, surpassing that of e-commerce rival JD.com. The company also announced that Lu Qi, Baidu's former chief operation officer, will serve as Pinduoduo's independent director and chairman of its compensation committee.

Why it’s important: Pinduoduo has become one of the fastest-growing startups in China despite competition from e-commerce giants Alibaba Group and JD.com. (Source: Caixin, link in Chinese)

4. Mainland Subsidiaries of Taiwan Lianhua Electronics Plan IPO Applications

What: Taiwan Lianhua Electronics announced that its mainland subsidiaries, including HeJian Technology (SuZhou) Co., Ltd. and Lianxin IC Manufacturing (Xiamen) Co., Ltd., will apply for listings on mainland stock markets. Most of these subsidiaries are focused on developing semiconductor products.

Why it’s important: If approved, this will see the second listing of a Taiwan tech company on the mainland, after Foxconn Industrial raised 27 billion yuan in its initial public offering in Shanghai at a share price of 13.77 yuan in June. (Source: Xinhua, link in Chinese)

BIG TECH COMPANIES

5. Douyin Halts Advertising Service After Ads Insult Chinese Martyrs

What: Beijing internet regulators have ordered Douyin, a popular Chinese short video app controlled by ByteDance, and Chinese search engine Sogou to carry out ‘rectifications’ for their advertisement businesses. Earlier in June, Douyin’s ad on Sogou was found by regulators to have insulted Qiu Shaoyun, a Chinese martyr killed during the Korean War.

Why it’s important: Douyin and Sogou announced that they will cease advertising services for an unspecified period, which could negatively impact their advertising revenue. (Source: China Daily)

POLICY

6. Chinese Telecom Companies Stop Collecting Domestic Data Roaming Fees

What: China officially abolished domestic data roaming fees on Sunday after policy changes by the country’s three major telecommunications operators. All customers can now use mobile data throughout the Chinese mainland without paying roaming fees.

Why it’s important: Cancelling domestic data roaming fees was a goal in this year’s government work report announced by Chinese Premier Li Keqiang in March. It is seen as a way to reduce costs for increasingly digital Chinese consumers. (Source: Legal Mirror, link in Chinese)

Compiled by Zhang Erchi and Zhang Yidi