SoftBank-backed Beike Shares Surge In NY Debut After Raising $2.12b In IPO

Shares of SoftBank-backed KE Holdings Inc jumped 75% in their New York debut on Thursday, after the Chinese online real estate broker raised $2.12 billion in its initial public offering that was priced above its earlier target range.

Shares of KE, also known as Beike Zhaofang, opened at $35.06 per American depositary share (ADS), compared to its IPO price of $20 per ADS.

The company, which owns property brokerage brand Lianjia and housing transactions platform Beike, said earlier on Thursday it sold 106 million ADSs for $20 each.

The company had aimed to sell each ADS, representing three Class A ordinary shares, at between $17 and $19.

Apart from SoftBank Group Corp, KE counts Tencent Holdings Ltd, Hillhouse Capital and Sequoia Capital among its largest investors.

KE’s share sale is the largest IPO of a Chinese company since March 2018, when video streaming site iQiyi raised $2.4 billion from its U.S. listing.

The IPO comes at a time the U.S. government is threatening to delist Chinese companies that do not meet U.S. accounting standards.

Despite the threat and rising U.S.-China tensions, the allure of a valuation on the world’s biggest stock market makes the risk of eventual delisting manageable, while Chinese tech firms find the regulatory burden of a U.S. listing lighter than that in mainland China or Hong Kong.

The listing also marks the second-largest U.S. IPO of the year, after Royalty Pharma, which raised $2.18 billion in its stock market debut earlier this year.

Goldman Sachs, Morgan Stanley, China Renaissance, J.P. Morgan and CICC were among the underwriters for KE’s IPO.

Reuters