Jiana, a Suburban Real Estate Developer, Seeks $10 Million IPO
Another company operating in China's real estate sector, Jiana Science and Technology Co. Ltd., is eyeing a $10 million public offering in New York.
For the past three years, Shenzhen-based Jiana has been selling the prepaid digital cards of tech giant NetEase Inc. (Nasdaq: NTES) and operating a software development business in addition to real estate consulting.
However, in its prospectus filed Friday with the U.S. Securities and Exchange Commission, the company said it is transitioning to a "full-service" real estate company and expects to cease its other lines of operation in the near future.
Jiana explained this transition by its intent to correspond with "the recent government's initiative of rural development."
It also said it differs from its competitors by focusing on large-scale real estate projects instead of individual properties. Jiana holds exclusive development, service and sale rights to a large-scale suburban real estate development project located in Heyuan, Guangdong province, called Heyuan Lighthouse Basin (Shuntian) Pastoral Complex.
"We believe upon final completion within the next few years, the Lighthouse Project will become a suburban town integrating and balancing between natural and vibrant living," Jiana wrote in its filing.
Founded in 2008, the company operates through a variable interest entity (VIE), Shenzhen Jiana Technology Co. Ltd., in China. Since 2016, Jiana operates a real estate e-commerce platform, Fangrong Online.
For the fiscal year ended April 2019, Jiana reported that 83.7% of its revenue was generated from real estate agency services. The rest, 5.6% and 10.3% of the revenue, came from NetEase digital cards and IT services, respectively.
The company reported $3.5 million in revenue for the twelve months through April 2019, down 57% year-over-year. Costs of revenues were $910,500 compared with $6.5 million for the year through April 2018. Net income in the fiscal 2019 has doubled to $1.6 million, according to the prospectus.
Jiana said it plans to use the proceeds of its offering in New York for advertisement and marketing, as well as working capital. It expects to become publicly traded on the Nasdaq Capital Market.
The company hasn't appointed an underwriter as of its Jan. 17 filing.
Jiana's proposal follows a string of China real estate IPOs in New York. Just on Friday, Phoenix Tree Holdings Ltd. (NYSE: DNK) celebrated its offering on Wall Street with a $129.6 million offering priced at $13.50 per ADS. The company, a China-based co-living platform, ended flat on debut.
In November, Fangdd Network Group Ltd. (Nasdaq: DUO) and Q&K International Group Ltd. received a warm welcoming in Times Square. Fangdd, one of China's largest online real estate marketplaces, raised $78 million in a flotation of 6 million American depositary shares. Q&K (Nasdaq: QK), a long-term apartment rental provider, followed with a $45.9 million IPO.