Tencent-backed live-streaming firm DouYu prices U.S. IPO at low end of range (updated)

DouYu International Holdings

17/07/2019 03:30

(Adds company pricing, deal details, background)
    By Joshua Franklin and Julie  Zhu
    NEW YORK/HONG KONG, July 16 (Reuters) - DouYu International
Holdings Ltd  DOYU.N , China's largest live-streaming platform,
on Tuesday said it sold $775 million in stock at a $3.73 billion
valuation after pricing its U.S. initial public offering (IPO)
at the bottom of an indicative range.
    DouYu, which is backed by Chinese social media and gaming
giant Tencent Holdings Ltd  0700.HK , sold American depositary
shares (ADS) at $11.5 each, compared with a previously stated
target of $11.50 to $14.00, the firm said in a statement. Every
10 ADSs represent one ordinary share.
    That makes the deal the largest Chinese IPO in the United
States so far in 2019, eclipsing that of Luckin Coffee Inc
 LK.O  which raised $645 million, according Refinitiv data.
    However the weak pricing opens questions about the necessity
of DouYu's decision in May to put its IPO on hold amid a global
markets sell-off stemming from U.S.-China trade tensions.
    The IPO was also a test of U.S. investor demand for Chinese
stocks after Anheuser Busch InBev NV  ABI.BR  called off the
Hong Kong listing of its Asia-Pacific brewing business due to
weak orders from U.S. "long only" fund managers.  urn:newsml:reuters.com:*:nL4N24G1QS
    DouYu, which primarily focuses on the live-streaming of
games, is one of several Chinese start-ups in the growing market
for live-streaming in the world's second-biggest economy, along
with Huajiao and U.S.-listed Huya Inc  HUYA.N .
    DouYu has exclusive streaming rights to 29 major tournaments
in China, including League of Legends, PlayerUnknown's
Battlegrounds and DOTA2, according to its IPO filing.
    The rapid growth of the live-streaming sector has seen
China's tech heavyweights - Tencent, Alibaba Group Holding Ltd
 BABA.N  and Baidu Inc  BIDU.O  - open their wallets to back a
slew of firms in the hope of boosting existing services in
e-commerce, social networking and gaming.
    DouYu's losses in 2018 widened to 876.3 million yuan
($127.43 million) from 612.9 million yuan a year earlier, its
prospectus showed. The company did, however, report a profit of
18.2 million yuan for the first three months of 2019.
    Of the shares on sale in the IPO, DouYu sold two-thirds to
raise $517 million, with the remainder sold by existing
investors.
    Shares of DouYu, which translates to "Fighting Fish", are
due to start trading on Wednesday under the symbol "DOYU" on the
Nasdaq stock exchange.
    Morgan Stanley, JPMorgan, Bank Of America Merrill Lynch and
CMB International are the underwriting banks on the IPO.
    ($1 = 6.8769 Chinese yuan renminbi)

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Hold the beers: Budweiser APAC IPO hit by investor push-back   
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 (Reporting by Joshua Franklin in New York and Julie Zhu in Hong
Kong; Editing by Christopher Cushing)
 ((joshua.franklin@thomsonreuters.com; +1 646-223-6356; Reuters
Messaging: joshua.franklin.thomsonreuters.com@reuters.net))