Chinas SaaS Developer Fortune Trend To Raise $253m In STAR Market IPO

Shenzhen-headquartered securities industry software-as-a-service (SaaS) provider Fortune Trend Technology Co., Ltd, has said that its initial public offering has been oversubscribed as it seeks to raise an aggregate of 1.79 billion yuan ($253 million) on the Nasdaq-like STAR Market of the Shanghai Stock Exchange.

Ahead of IPO, Fortune Trend sold 6.97 million shares of 16.67 million shares at 107.41 yuan ($15) apiece.

State-backed China Galaxy Securities is acting as a principal underwriter of the deal. Fortune Trend will float the shares under the symbol “688318”.

Founded in 2007 by Huang Shan, Fortune Trend derives its revenue from securities trading systems and maintenance services, which contributed to over 84 per cent of the earnings for three years in a row.  

During the same period, its net profits grew from 118 million yuan ($17 million) in 2017 to 142 million yuan ($20 million) in 2018 and 174 million yuan ($25 million) in 2019.  As of December 2019, it had assets under management of 1.07 billion yuan ($152 million).

Fortune Trend-managed brand Tongdaxin holds a key market share in internet-based trading. It has built long-term partnerships with a battery of marquee clients comprising state-backed CITIC Securities, China Merchants Securities, Guotai Junan Securities, HK-listed China Securities,  HK and SZ dual-listed GF Securities, Guosen Securities, among others. 

Fortune Trend will allocate the IPO proceeds to revamp up its AI-based programme, visualized financial research systems, trading platforms, and big data-driven security monitoring interface.

Following the IPO, Huang Shan will remain the largest shareholder in Fortune Trend holding a combined 69.13 per cent stake. CITIC Securities’s investment vehicle Goldstone (2.25%) and Haitong Securities’s subsidiary Haitong Kaiyuan (1.50%) will be the majority shareholders, whose st. Goldstone and Haitong Kaiyuan’s stakes will come down by 0.25 per cent and 0.5 per cent, respectively. 

Back in 2010, Goldstone and Haitong Kaiyuan had injected a total of 5 million yuan ($706,487) in Fortune Trend.

Fortune Trend competes with other securities industry SaaS providers including SZ-listed Hithink RoyalFlush Information Network, SH-listed Shanghai DZH Limited, Eastmoney and SZ-listed Beijing Compass Technology Development.