Chinese Investment Bank AMTD Sets Terms For $172m US IPO

Hong Kong-based financial services firm and boutique investment bank AMTD International has set the terms for its initial public offering (IPO) on the US stock market, with plans to raise $172 million at the midpoint of its proposed price range, according to the company’s latest filing.

Dealmaker Calvin Choi’s AMTD International said it will offer 20.8 million American depositary shares at a price range of $8.10 to $8.48. The firm, which will list the ADSs on the New York Stock Exchange under the symbol “HKIB”, would command a market valuation of $1.9 billion at the midpoint of the proposed offering.

AMTD offers investment banking services, including equity underwriting, debt underwriting, advisory (on credit rating, financing, and mergers and acquisitions transactions), securities brokerage, institutional sales and distribution, and research, among others.

Between April and June 2019, the firm issued an aggregate of 8,236,838 Class A ordinary shares in a series of transactions to several investors, mostly the firm’s past underwriting clients, for an aggregate consideration of $53.5 million.

These pre-IPO investors include Chinese smartphone giant Xiaomi Corporation, Morgan Stanley Private Equity Asia IV, online travel agency Tongcheng-Elong Holdings Ltd, ticketing app Maoyan Entertainment, digital advertising startup Mobvista Inc, and Indochina Fund Limited.

Chinese equity investment firm Longling Capital, Hong Kong-listed hotel operator Regal Hotels International Holdings, investment firm Sun Hung Kai & Co, entrepreneurs George Chan and Chen Weijie, former Citigroup banker Francis Leung, and financier David Chiu were also on the list.

Xiaomi Corporation engaged AMTD as its joint bookrunner in its $5.4 billion Hong Kong IPO in June 2018.

The interlocking relationships are an intentional part of AMTD’s business model. In the IPO documents, AMTD describes building an ever-extending network dubbed the “SpiderNet ecosystem” which it says can foster “rapid multi-dimensional expansion.”

The company said it aligns itself with clients, shareholders, business partners, and investee companies to build an ever-extending, inter-connected network that creates value for all stakeholders, or the “AMTD SpiderNet” ecosystem.

“We believe that our AMTD SpiderNet ecosystem is the bedrock of our success,” the firm wrote.

The company, which was founded in 2003 and booked $155 million in revenue for the 12 months ended March 31, 2019, said in its filing that it will use the proceeds to invest in its business and infrastructure expansion and finance potential acquisitions or investments in complementary businesses.

The company’s expansion plans include setting up new subsidiaries, acquiring new talent, and applying for new business licences in other jurisdictions.

According to a CIC report cited by the company, AMTD ranked first among all independent investment banking firms in Asia as measured by both the number and the aggregate offering size of Hong Kong and US IPOs completed in 2018 and the first quarter of 2019.

It also ranked ninth and third as a bookrunner among all investment banking firms as measured by the number of Hong Kong IPOs priced in 2018 and the first quarter of 2019, respectively.

“Upon the completion of this offering, we will be a ‘controlled company’ as defined under the NYSE Listed Company Manual because our controlling shareholder will hold more than 50 per cent of the voting power for the election of directors,” AMTD said.