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

Luckin Coffee

26/05/2020 21:34

(Adds details on company's finances)
    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 U.S.-China
tensions 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 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 Walmart Inc  WMT.N , the world's largest
retailer.
    Dada aims to sell around $500 million in stock, with JD.com
and Bentonville, Arkansas-based Walmart expected to be
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.
 urn:newsml:reuters.com:*:nL4N2D435V
    In Dada's favor is an uptick in demand for delivery services
during the lockdowns enforced in many cities to curb the
COVID-19 outbreak. Dada operates local on-demand delivery
platforms JD-Daojia and Dada Now.
    Shares of Chinese cloud computing company Kingsoft Cloud
Holdings Ltd  KC.O , expected to benefit from current economic
conditions, have risen above their IPO price since going public
in New York last month.  urn:newsml:reuters.com:*:nL4N2CQ15X
    Dada's net loss last year widened to 2.46 billion yuan 
($344.97 million) from 2.39 billion yuan in 2018. Net revenue in
the first quarter rose to 1.1 billion yuan from 526.5 million
yuan a year earlier.
    ($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 and Richard
Chang)
 ((joshua.franklin@thomsonreuters.com; +1 646-223-6356; Reuters
Messaging: joshua.franklin.thomsonreuters.com@reuters.net))