Huize Sets Price Range Ahead of $54 Million IPO in New York

The Chinese insurance platform will raise about a third of the amount it targeted earlier.

Author: Anna Vodopyanova   

Huize Holding Ltd., set to become publicly traded on the Nasdaq Global Market next week, has announced the price range for its offering.

The online insurance platform expects to sell 4.7 million of its American depositary shares at between $9.40 and $11.40 each. At the top of the range, Huize would raise $53.6 million in its initial public offering. That's a third of what the company targeted to raise in earlier filings.

Of that offering, up to $50 million may be acquired by corporate investors who have indicated interest, Huize said.

Based in Shenzhen, Huize operates an online platform where it connects users and insurance providers. In its prospectus, the company said it is not affiliated with any insurance providers. Its target user base is China's younger generation.

For the nine months through September 2019, Huize reported revenue of $102.8 million, more than double year-over-year. Net income in the same period reached $3.1 million. For the full year 2018, the company stated revenue of $71.2 million on income of $440,000.

In his September analysis of Huize's IPO, CW columnist Donovan Jones, creator of VentureDeal, wrote, "The market opportunity for online insurance product sales in China appears to be large but growing unevenly, possibly due to macroeconomic factors."

Jones also said that underwriting by Morgan Stanley is a good sign. However, in Huize's amended prospectus filed with the U.S. Securities and Exchange Commission on Thursday, the bank was no longer listed among the underwriters.

Now, Citigroup Global Markets Inc. and China Int'l Capital Corp. Hong Kong Securities Ltd. are lead securers on the deal. Co-managers are Tiger Brokers (NZ) Ltd. and Valuable Capital Ltd. Upon the IPO, underwriters may acquire an additional 697,500 ADSs of Huize for over-allotment.

Huize wrote it intends to use the proceeds to invest in technology and analytics to boost its client acquisition and risk management capabilities. It also plans to invest in product design and developments and general corporate purposes, it said.

The flotation is scheduled for Wednesday, Feb. 12., under the stock symbol "HUIZ." As China is currently suffering from coronavirus and some discriminatory fears, the celebration may not be so merry on Times Square that day. It will, however, be indicative of investor sentiment amid the deadly epidemic.