Global Internet of People Back on Track to IPO in New York
Global Internet of People Inc., a Chinese consulting company, has picked up its U.S. IPO efforts, seeking to raise up to $21 million.
In a filing with the U.S. SEC, the Beijing-based company said it seeks to sell 4.2 million ordinary shares at a fixed price of $5 apiece in a deal underwritten by ViewTrade Securities Inc.
Global Internet has been pursuing an IPO in New York since September and, now that China seems to be recovering from the Covid-19 pandemic, it's once again set on the path to public trading on Wall Street. Even after the warning by SEC Chairman Jay Clayton against investing in Chinese companies due to lack of transparency, there is no shortage of these businesses that seek to grow their brand and raise capital in this way.
Initially a consulting company, Global Internet now also operates a peer-to-peer knowledge sharing and enterprise service platform. It has a number of content platforms, a mobile app, called "Shidonghui App," and operates offices in Beijing, Shanghai and Hangzhou, as well as 51 local centers operated by its members in 35 cities in China.
Its mission: "To become a worldwide leading knowledge sharing and enterprise service platform."
In March, Global Internet said its network counted 5.49 million users and 1,425 paying members. It also had 520 mentors and 850 experts, who provide services such as consulting and sharing informational content.
Global Internet has been profitable since 2018. For 2019, the company reported $17.9 million in revenues, a 33% increase year-over-year. Fees generated from enterprise services accounted for 85% of that revenue. Net income last year reached $9.4 million, according to the prospectus.
The company said it aims to use the proceeds of its IPO for content providing (30%), technology upgrade (20%), marketing, branding, and sales (20%), training and recruitment (5%), and acquisitions (25%).
In its filing, Global Internet said its offline operations were adversely affected by the Covid-19 outbreak in China. In response, the company shifted its offline operations online through WeChat, China's top social networking app.
The company wrote, "As for our enterprise services, as of April 20, 2020, although we were still unable to provide any sponsorship advertising services as these require offline venues, we have experienced an increasing demand for our comprehensive tailored services, which were provided to clients through online communications and conferences. We also started to expand our new revenue stream from sale of merchandise to meet our members' and enterprise clients' business needs. The increasing demand for our online services and growth in sale of merchandise which was started at the end of 2019 has helped mitigate the adverse impact on membership services and enterprise services."
Global Internet also said its estimated revenues from online services soared 8,000% in the first quarter, while revenues from member services are estimated to drop by 50%-55%, and revenues generated from enterprise services are estimated to decrease by 10%-15% from a year ago.
Global Internet has applied to trade under the ticker symbol "SDH" on the Nasdaq Capital Market.
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