March 20, 2018 / 7:00 AM / 9 months ago

Books covered for iQiyi’s U.S. IPO

FILE PHOTO: A person holds a phone with Baidu Inc's video streaming service iQiyi in Jinan, Shandong province, China, in this May 25, 2016 photo illustration. REUTERS/Stringer/File Photo

HONG KONG (IFR) - The books are covered for the U.S. IPO of iQiyi, Baidu’s video-streaming service.

The Nasdaq IPO of up to US$2.38bn, the biggest Chinese listing in the US in more than three years, generated strong momentum since bookbuilding started on Monday, according to people familiar with the situation.

The company, often seen as the Chinese version of Netflix, is selling 125m primary American depositary shares at an indicative price range of US$17–$19 each.

The price range represents a 2018 P/S of 3.4–3.8 and a 2019 P/S of 2.5–2.8, and post-shoe market capitalization of US$13.2bn–$14.8bn.

The company launched a US$2.13bn–$2.38bn IPO on Monday. The fundraising size is 42%–59% higher than the originally filed US$1.5bn.

Even at the low end, this is set to be the biggest Chinese float in the US since the US$25bn listing of Chinese e-commerce giant Alibaba in September 2014.

There is an option for a size increase of up to 18.75m primary ADS, representing 15% of the base deal.

Bank of America Merrill Lynch, Credit Suisse and Goldman Sachs are joint bookrunners on the transaction. China Renaissance, Citigroup and UBS are the co-managers.

Reporting by Fiona Lau; Editing by Dharsan Singh

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