Chinese payment provider LianLian DigiTech files US$78 million Hong Kong IPO, less than a fifth of its target a year ago

The Hangzhou-based company is offering 55.9 million shares at HK$10.95 each, for expected proceeds of HK$485 million after underwriting fees and expenses, according to its prospectus filed with the Hong Kong stock exchange on Wednesday.

The firm, a provider of cross-border e-commerce payment services, said it would start taking orders from investors on Wednesday, with the listing set for March 28.

Last year, 27 IPOs, or 42 per cent of the total, ended the year below their offer prices, according to Bloomberg data. Hong Kong’s 2023 IPO value fell 53.5 per cent year on year to a 20-year low of US$5.9 billion from 68 listings, according to Refinitiv data.

Chinese ride-hailing start up Dida has also revived its plans to list in Hong Kong, according to a filing on the exchange on Tuesday. It aims to raise about US$200 million, according to sources reported by Bloomberg.

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LianLian said the proceeds from its listing will go toward enhancing its technological capabilities and expanding its global business operations over the next five years, including in Southeast Asia, the Middle East and South America.

Specifically, LianLian said the capital will go towards building an advanced, modular distributed-payment platform, enhancing its risk-management platform using generative artificial intelligence and developing a scalable distributed cloud-based data centre, among other plans.

Cornerstone investors Hangzhou Urban Investment and Hangzhou High-tech Venture Capital will subscribe to a total of HK$364 million of LianLian’s shares. CICC and JPMorgan are the overall coordinators for the IPO.

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Founded in 2009, LianLian has 64 payment licences and certifications worldwide as of the end of 2023, operates in more than 100 countries and supports more than 130 currencies. It claims it has the broadest global licence coverage among all China-based providers of digital payment solutions, and it is the only licence holder for every US state, according to market research company Frost & Sullivan.

The company previously raised funds through investments from the likes of Boyu Jingtai, Everbright Investment, China International Capital Corp and Sequoia Zhensheng.

Hong Kong Exchanges and Clearing’s main board dropped to eighth in the global IPO table in 2023, the lowest since 2001 when it ranked 14th, according to Refinitiv. The city last topped the league in 2019, with 144 IPOs raising US$40 billion.