HK-based Mobile Data Traffic Sharing Platform UCloudlink Set Sights On $61m Nasdaq IPO

Hong Kong-based mobile data traffic sharing marketplace uCloudlink has priced its proposed initial public offering (IPO) on the Nasdaq to raise up to $61.23 million, according to an updated prospectus lodged with the US Securities and Exchange Commission (SEC).

The company, which filed confidentially in late May 2019, plans to offer almost 2.60 million American Depositary Shares (ADS) priced between $18 and $20.5 apiece.

uCloudlink commenced operations in 2014 and now derives the vast majority of its revenue by providing international travellers with mobile data connectivity services and Wi-Fi terminals that incorporate the services.

Since the coronavirus pandemic hit China and the rest of the world in early 2020, uCloudlink has seen a number of “significant risks” imposed on its business as governments around the world introduced measures like travel restrictions, border closings, quarantines and social distancing measures to contain its spread, it said in its prospectus.

The company registered revenue of $33.5 million in the first quarter of 2020, down 37.6 per cent from $53.7 million in the fourth quarter of 2019.

“We estimate that the decline will continue during the second quarter and recover gradually in the next two quarters,” said the company in the updated prospectus. “But there is no guarantee that our revenues from international data connectivity services, sales of terminals and provision of PaaS and SaaS services will recover in the remaining three quarters of 2020.”

In the past three years, its revenue increased from $85.8 million in 2017 to $126.4 million in 2018, and further to $158.4 million in 2019, according to its prospectus.

Entities affiliated with Hong Kong-based brokerage firm Haitong International, and Chinese state-backed Beijing Cash Capital Venture Partners, hold 13.4 per cent and 10.1 per cent shares in uCloudlink, respectively.

Its co-founder and CEO Chen Chaohui is the largest shareholder with a 24.8 per cent stake, followed by co-founder and chairman Peng Zhiping, at 23.2 per cent.

New York-based I-Bankers Securities, which focuses on small-cap equity markets, Hong Kong’s Valuable Capital, Chinese online brokerage Tiger Brokers, and Chicago-based investment bank Loop Capital Markets are the joint bookrunners on the deal.

uCloudlink plans to list on the Nasdaq under the symbol UCL.