Chinese Software Developer Foxit Eyes $418m In STAR Market IPO

Fujian Foxit Software Development Joint Stock Co., Ltd, a developer of PDF applications, has kicked off the subscription exercise of its initial public offering (IPO) on the Nasdaq-style STAR Market of the Shanghai Stock Exchange, according to a company filing on Monday.

The company is offering 12.04 million common shares at 238.53 yuan ($34.74) apiece, and aims to raise 2.87 billion yuan ($418 million). The shares have been oversubscribed 4,495 times.

Fuzhou-based China Industrial Securities is the principal underwriter for the deal, while Guotai Junan Securities is the joint underwriter.

Fujian-based Foxit plans to invest the IPO proceeds to spruce up its PDF products and services, and also to develop its global sales and marketing networks. The company is a software provider delivering PDF solutions and other portable document format tools. Its products include Foxit PDF Reader, the image editing software Studio Photo, and Mobile PDF Editor.

The company claims to have served over 560 million users and 100,000 clients across more than 200 countries. Its top customers include Amazon, Microsoft, Dell, Pearson, Commerzbank, and ConocoPhillips. As much as 91 per cent of Foxit’s annual sales revenues in the past three years were accrued from overseas markets, mainly US, Europe, Japan, and Australia.

The company currently has business centres in the US, Europe, Japan, and Australia, and plans to expand into emerging markets such as Russia, Brazil, and India.

Foxit had an operating income of 226 million yuan ($33 million) in the first half of 2020, up 46.55 per cent compared with the same period of 2019. It clocked a net profit of 62.38 million yuan ($9 million) in the six-month period, a year-on-year jump of 265.59 per cent, it said in its IPO prospectus.

George Zheng Gao, president, Foxit, is the largest shareholder in the company with 51.22 per cent stake. State-backed shareholders comprise Huaxing Venture (4.70%), Industrial Securities (0.96%),  Great Wall Securities (0.56%), and Shouzheng Zefu Innovation Investment (0.17%).

In 2010, Huaxing Venture made an undisclosed strategic investment in Foxit. Subsequently in 2015, Guotai Junan Securities and Industrial Securities collectively infused 12 million yuan ($1.8 million). The company’s investors also include state-owned CITIC Securities, Hotland Innovation Asset Management, and Dunbo Capital.