IPO | Weibo-SW will be offering shares now, with an issue price of no more than HK$388

News from Futu News, November 29th, this Monday$WB-SW (09898.HK)$ The announcement was announced that it will issue 11 million shares from November 29 to December 2. The company plans to issue 11 million shares, including a public sale of 1.1 million shares and an international sale of 9.9 million shares, with an issue price of no more than HK$388 per share, and 20 shares per lot. It is expected to be listed on December 8.

Weibo is a leading social media platform in China for people to create, discover, and distribute content. The company was listed on the US NASDAQ in April 2014. The stock code is “WB”, US stock$Weibo (WB.US)$ The closing price of the previous trading day was $42.79.

Weibo has built up a huge user base in China and the Chinese community in more than 190 countries around the world. In June 2021, Weibo had 566 million monthly active users, with an average of 246 million daily active users. According to the Insights Advisory Report, based on monthly active users and daily active users in June 2021,Weibo is one of the top ten mobile apps in China and one of China's top three social media platforms.

Sina and Ali are the most important shareholders of Weibo. Among them, Sina holds 44.4% of the company's shares and Ali holds 29.6% of the company's shares (disclosed on September 30, 2021).

In terms of financial data, Weibo began monetizing mainly through the sale of advertising and marketing services in 2012, and to a lesser extent through value-added services (mainly VIP membership, live streaming, and game-related services).

From 2018 to 2020, the company's total revenue was US$1,719 million, US$1,767 million and US$1,690 million respectively, and recorded operating profits of US$609 million, US$598 million and US$507 million during the same period.

In the first three quarters of 2021, the company recorded revenue of US$1,641 million and operating profit of US$515 million, a significant increase over the same period last year.

On the industry side, advertising revenue generated by social media platforms increased from RMB 8.3 billion in 2016 to RMB 138.6 billion in 2020, with a compound annual growth rate of 102.2%, and is expected to further increase to RMB 480.7 billion in 2025 at a compound annual growth rate of 28.2% between 2020 and 2025.

In terms of funding, based on the maximum sale price of HK$388, the IPO is expected to collect approximately HK$2,004 billion in net proceeds from the global sale (after deducting underwriting commissions and other estimated expenses related to the global sale). The company intends to use the net proceeds from the sale of shares for the following purposes:

Approximately 45% is used to continuously expand the user base, increase user engagement, and improve the content ecosystem;

About 25% is used for R&D to enhance user experience and monetization capabilities;

Approximately 20% is used to selectively seek strategic alliances, investments and acquisitions;

Approximately 10% is used for working capital and general corporate purposes.

Northern/Aurora

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