Q&K, a Chinese Home Rental Platform, Seeks $100 Million U.S. IPO
Q&K International Group Ltd., a long-term apartment rental platform in China, seeks to raise $100 million in an initial public offering in New York.
The Shanghai-based company, founded in 2012, provides rental and value-added services, targeting China's youth in urban areas, according to its prospectus filed Tuesday with the U.S. Securities and Exchange Commission. Q&K said it focuses on "conveniently-located, ready-to-move-in, and affordable" housing.
For the nine months through June, the company reported revenue of $130.8 million up 51% year-over-year. Net loss was $54.4 million, at an increase of 15% from the same period last year, according to the filing.
For the fiscal year 2018, Q&K reported $129.6 million in revenue, up 70% from 2017. Net loss was at $72.8 million, double from the preceding year.
The revenue from value-added services as a percentage of total revenue increased from 2.6% in 2017 to 10.5% in 2018 and further increased to 11.7% for the nine months ended June 2019. Q&K said it was further expanding its value-added products and services.
As of Dec. 31, 2018, the penetration rate of branded long-term rental tenants was 46% in the U.S., while China's was only 1.8%, Q&K stated in its filing. Meanwhile, China's urbanization rate in 2018 was still much lower than in many developed countries. Under this industry situation, Q&K ranked third among major operators in the branded long-term apartment rental market in China as of December 2018, it said, citing research by China Insights Consultancy.
With the funds from the IPO, Q&K hopes to expand its network of apartments and boost its technology and infrastructure.
Q&K applied to list its American depositary shares on the Nasdaq Global Market under the symbol "QK."
Morgan Stanley & Co. LLC and China International Capital Corp. Ltd. will act as the underwriters on the expected IPO.
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