China's Dada Nexus to kick off $500 mln U.S. IPO this week -sources

Luckin Coffee

26/05/2020 20:37

By Joshua Franklin, Scott Murdoch and Julie Zhu
    NEW YORK/HONG KONG, May 26 (Reuters) - Chinese delivery firm
Dada Nexus Ltd  DADA.O  will launch the investor roadshow for
its U.S. initial public offering as early as Wednesday,
according to people familiar with the matter, braving tensions
between Washington and Beijing over Chinese companies pursuing
their stock market debut in New York.
    The U.S. Senate passed legislation last week that could
prevent some Chinese companies from listing their shares on U.S.
exchanges unless they follow standards for U.S. audits and
regulations. Nasdaq Inc  NDAQ.O  also tightened listing
restrictions for companies from China and other countries.
    Shanghai-based Dada is backed by Chinese e-commerce firm
JD.com  JD.O  and U.S. retail giant Walmart Inc  WMT.N . 
    The company will aim to sell around $500 million in stock
with JD.com and Walmart expected to purchase shares in the IPO
as cornerstone investors, the sources said.     
    Dada and Walmart declined to comment. JD.com did not
immediately respond to a request for comment. 
    Investor scrutiny of Chinese IPOs in the United States has
increased in the wake of Chinese coffee chain Luckin Coffee's 
 LK.O  announcement in April that some employees had fabricated
sales accounts. Chinese firms may also be left with fewer
listing options after China said it would seek to tighten its
grip on Hong Kong, a popular IPO venue for Chinese companies.
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    In Dada's favor is an uptick in demand for delivery services
during the lockdowns enforced in many cities in the wake of the
COVID-19 outbreak. Dada operates local on-demand delivery
platforms JD-Daojia and Dada Now. 
    Chinese cloud computing company Kingsoft Cloud Holdings Ltd
 KC.O , another company whose business was seen as benefiting
from current economic conditions, has seen its shares trade
above their IPO price since going public in New York last month.
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    Dada's net loss last year widened to 2.46 billion yuan 
($344.97 million) from 2.39 billion yuan in 2018.
    Goldman Sachs, BofA Securities and Jefferies are the lead
underwriters to Dada's offering.
    ($1 = 7.1310 Chinese yuan renminbi)
    

 (Reporting by Joshua Franklin in New York, and Scott Murdoch
and Julie Zhu in Hong Kong; Editing by Andrea Ricci)
 ((joshua.franklin@thomsonreuters.com; +1 646-223-6356; Reuters
Messaging: joshua.franklin.thomsonreuters.com@reuters.net))