Futu, a China-based digital brokerage operator backed by internet group Tencent, yesterday set its price range at $10 to $12 per American Depositary Share (ADS) and will raise up to $150m.
The company will issue 10.9 million ADSs, representing 87.2 million ordinary shares, and list on the Nasdaq Global Market under the symbol FHL. Tencent has committed to purchasing $30m worth of ADSs as part of the offering.
Futu would achieve the $150m in proceeds if it floats at the higher end and underwriters exercise their over-allotment option.
Futu operates an online brokerage service primarily aimed at Chinese investors. The company had more than 502,000 clients by the end of December 2018 and brokered more than $115bn in trades during the past year.
Tencent contributed to an eight-figure renminbi series A round (RMB10m = $1.5m) in 2014 together with Matrix Partners China and Sequoia Capital. The same three investors returned the following year for a $60m series B round.
In 2017, Tencent led a $146m series C round that again featured Matrix Partners China and Sequoia China.
The company was initially rumoured to be seeking $500m in proceeds from its IPO in December before it filed to raise up to $300m last month.
Proceeds will go towards research and development, regulatory capital requirements and general corporate purposes.
Tencent currently owns a 38.2% stake in Futu, which will be diluted to 34.4%. Matrix will see its shareholding drop from 6.1% to 5.5%, while Sequoia’s stake will go from 4% to 3.6%.
Leaf Hua Li, founder, chairman and chief executive of Futu, is the company’s largest shareholder with a current 51.7% stake that will be diluted to 46.5%.
Goldman Sachs (Asia), UBS Securities and Credit Suisse Securities (USA) are acting as representatives of the underwriters, which also include HSBC Securities (USA) and BOCI Asia.
