Monday Tech Briefing: Douyu, SenseTime, WPP
DEALS & FUNDRAISING
1. Chinese Streaming Site Douyu Plans to Raise $700 Million in U.S. IPO
What: Chinese entertainment group Douyu is planning to raise $600 million to $700 million in a U.S. initial public offering (IPO), sources told the Financial Times. Douyu, which is backed by Tencent and offers both video streaming and online games, has been valued at $1.51 billion by analysts.
Why it’s important: Tencent is expanding into the competitive video-gaming scene through investments in Douyu and rival platform Huya. Huya went public in May, and its share price tripled in a month.
Big Picture: China is the world’s largest online video-games market, which was worth $700 million in 2017 and is expected to grow to $1.5 billion in 2020. (Source: Financial Times)
2. SoftBank Fund Said to Seek Investment in Chinese AI Giant
What: SoftBank Vision Fund hopes to invest nearly $1 billion in Chinese artificial intelligence startup SenseTime Group Ltd., which recently announced two other funding rounds worth more than $1.2 billion.
Why it’s important: China has become a major investment target of the Vision Fund, the world’s largest technology investor. Existing backers of SenseTime, which specializes in facial and image recognition, include Qualcomm Inc., Alibaba Group, and Temasek Holdings.
Big Picture: China aims to lead the world in artificial intelligence by 2030, and SenseTime is one of the many local startups at the forefront of this goal. (Source: Bloomberg)
3. Ascletis Kicks Off Hong Kong’s First Biotech IPO After Rule Change
What: Biotech firm Ascletis Pharma Inc. started its five-day IPO sales period on the Hong Kong Stock Exchange on Friday. The company, which is set to start trading on Aug. 1, aims to sell 224 million shares in a pricing range between HK$12 ($1.53) and HK$16 each, with the goal of raising as much as HK$3.6 billion.
Big picture: Ascletis is the first preprofit biotech enterprise to go public in Hong Kong since the exchange lowered the listing threshold for such companies in late April. Following Ascletis, six other biotech startups have filed for an IPO with the Hong Kong bourse, including Hua Medicine and Innovent Biologics Inc. (Source: Caixin)
4. China Tower Said to Draw Hillhouse, Alibaba to Hong Kong IPO
What: China Tower Corp., the state-owned cellular tower operator, has attracted Hillhouse Capital, Taobao China and eight other firms as cornerstone investors in a planned Hong Kong IPO that could raise about $8 billion.
Why it’s important: China Tower’s IPO could be the world’s largest in the past four years, and comes during a slump in the Hong Kong equity market.
Big Picture: China Tower was formed in 2015 by combining assets from China’s three major telecom operators, China Mobile Ltd., China Unicom Ltd. and China Telecom Corp., as part of broader wireless industry reforms. (Source: Bloomberg)
5. China's Suning Sports Raises $600 Million
What: Suning Sports has raised $600 million in a series A funding from investors including Alibaba Group and Goldman Sachs. The funding round puts the value of Suning Sports, which owns Italian soccer club Inter Milan, at $2.6 billion.
Big Picture: Suning Sports is attempting to boost its presence in China’s sports broadcasting market. It owns a number of sports teams and holds media rights in China for Germany’s Bundesliga, the English Premier League and the Spanish La Liga. Rival Youku recently paid about 1.6 billion yuan ($236.25 million) to broadcast the World Cup in China. (Source: Reuters)
BIG TECH COMPANIES
6. Alibaba, Tencent to Buy Stake in WPP’s Chinese Unit
What: Alibaba and Tencent are in talks to buy a roughly 20% stake in British advertising giant WPP’s Chinese unit, which would value WPP China between $2 billion and $2.5 billion, sources told Reuters.
Why it’s important: WPP is the world’s biggest advertising group, and is undergoing a leadership transition after its founder Martin Sorrell left in April following allegations of personal misconduct. WPP plans to pool its Chinese agency operations into a new holding company, which it will retain control of. (Source: Reuters)
7. Chinese Shopping App Pinduoduo Sued in U.S. Ahead of IPO
What: American diaper-maker Daddy’s Choice has sued Chinese shopping app Pinduoduo for allegedly allowing the sale of knockoff products on its platform, as Pinduoduo’s parent company prepares to list on the Nasdaq Stock Market.
Why it’s important: The trademark infringement lawsuit could be a stumbling block for Pinduoduo’s global expansion. The company has faced accusations of allowing sales of counterfeits, illegal goods, and inaccurately described products since its founding three years ago.
Big Picture: Pinduoduo’s user base has grown more than fivefold since it first launched its platform, making it China’s second-largest e-commerce provider just behind Alibaba, which has also faced allegations of piracy and counterfeiting. (Source: New York Times)
Compiled by Hou Qijiang and Qian Tong
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