Tencent-backed DouYu’s US$775 million IPO is the largest by a Chinese company in the US this year

Louise Moon

Live-streaming platform DouYu International Holdings has raised US$775 million, making it the largest Chinese IPO in the US this year after the company priced its deal at the low end of the indicative range.

DouYu, which is backed by Chinese gaming giant Tencent Holdings, sold 67.4 million American depositary shares (ADS) at US$11.5 each, giving it a valuation of US$3.73 billion.

The company had set a pricing target of US$11.5 to US$14 for the ADS. Every 10 ADS represent one share.

Despite a seemingly lacklustre pricing, the e-sports and gaming streaming company has overshadowed Luckin Coffee’s US$561 million initial public offering and social commerce company Yunji’s US$121 million fundraising. Both these companies listed on Nasdaq in May.

A screengrab of Chinese live-streaming platform DouYu’s website. Photo: DouYu

DouYu initially announced plans to raise US$500 million in April, before delaying the listing the following month amid global tensions which have filtered into the technology sector. In July, it filed again with the aim of raising up to US$994 million.

The original filing came almost a year after its closest rival, Huya – also backed by Tencent – raised US$180 million in the US.

DouYu, founded in 2014 in Wuhan in central China’s Hubei province, will begin trading on the Nasdaq Global Select Market – one of the three tiers of the New York-based stock exchange – on Wednesday under the symbol “DOYU”.

Morgan Stanley, JP Morgan, Bank of America Merrill Lynch and CMB International Capital led the deal.

In 2018, DouYu reported a net loss of 876.3 million yuan (US$127.4 million), up from 612.9 million yuan the previous year. Revenue, however, was up 94 per cent year on year, thanks in part to its six million paying users.

For the first three months of this year, the company reported a net profit of 18.2 million yuan.

During that time through March, it attracted nearly 160 million monthly active users across its platforms, up 26 per cent year on year.

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