BEIJING–(BUSINESS WIRE)–Metaverse HK’s first IPO, Flowing Cloud Technology Ltd(6610.HK), officially launched on September 29 with a fundraising amount of around US$100 million.
The deal was highly sought after in the Hong Kong and overseas market. On the first day of bookbuilding, the HK IPO was 5 times oversubscribed, which is the largest HK IPO by such times oversubscribed at the open house this year.
The international placement tranche was also covered several times over the price range on the first day. And it has attracted a good mix of investors, including foreign and Chinese long-only funds, hedge funds, family offices, strategic companies, etc., who believe Flowing Cloud Tech could be the next Unity (U.US) in China.
It’s worth nothing that the deal brought in well-known cornerstone investors, including SenseTime, the top AI company in China; the state-owned investment arm of Anji, one of the development engines alongside Hangzhou in Zhejiang Province; Tradego, the widely used fintech platform for securities firms in Hong Kong.
Flowing Cloud is a leading AR/VR software technology service company in China, which ranks 1st in China AR/VR service market with a market share of 13.5% in 2021.
From 2019 to 2021, Flowing Cloud’s revenue was RMB 251 million, RMB 339 million and RMB 595 million, respectively, and the compound annual growth rate of revenue over the past three years was 54.02%. Revenue for the first quarter of 2022 was RMB228 million, up 65.0% year-on-year.
The company achieved adjusted net income of about RMB 105 million in 2021 and a year-on-year increase rate of 315.9% in the first quarter of 2022.
The AR/VR market in China is showing great dynamism, both hardware and software. The development of tools will be the crucial building blocks for the prosperity of a new world. Flowing Cloud is one of the best vendors in the software market offering development services and kits for Chinese business customers. The company maintains good cooperation with Chinese tech giants like Baidu, Huawei, Tencent, JD.com, etc.
Flowing Cloud Tech’s valuation is between HK$4 billion and HK$5 billion with an expected P/E of around 15x-20x. Reasonable pricing leaves profits on the table for potential investors. The book continues to grow in size and quality with more conversions from the management deal roadshow and will close on October 10th.
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