Connectivity Provider uCloudlink Sets Price Range for IPO

At a time when Chinese companies are under threat of the new listing policies, this Hong Kong company pursues its public offering in the U.S.

Author: CapitalWatch Staff   

Hong Kong-based uCloudlink Group Inc. has set the terms for its initial public offering worth up to $53.2 million.

A marketplace for mobile data traffic sharing, uCloudlink said in its latest filing that it seeks to sell 2.6 million American depositary shares in the price range of $18.00 and $20.50. That's a slightly higher target than the company estimated in its preliminary prospectus of early May.

UCloudlink uses its cloud SIM technology to distribute mobile data from 230 network operators in 144 countries. The platform allows users to connect to local network operators in those countries without the need to switch SIM cards.  As of March 31, uCloudlink owned 50 patents in the cloud SIM technology field, according to its filing.

For the three months through March, uCloudlink reported revenues $33.5 million, a 36% increase from the first quarter of 2019. Net income was $249,000 in contrast to losses of $909,000 a year ago, according to the prospectus.

For the year ended 2019, the six-year-old platform reported revenues of $158.4 million, up 25% year-over-year. Net income was $5.2 million in contrast to net loss of $26.6 million for 2018.

"In 2019, average daily active terminals connected to our platform reached approximately 187,781 and each on average used 1,386 megabytes of mobile data per day," uCloudlink wrote.

However, uCloudlink said in its filing that Covid-19 has negatively impacted global travel and has thus weighed on the demand for international data connectivity.

Underwriters on the deal are I-Bankers Securities Inc., Valuable Capital Ltd., Tiger Brokers (NZ) Ltd., and Loop Capital Markets LLC.

UCloudlink has applied to list its ADSs on the Nasdaq Global Market under the symbol "UCL." The date of the public debut is not yet official, according to Nasdaq.com.

The capital from the public offering will boost the company's R&D, general corporate purposes including sales and marketing, as well as working capital, and 22% of the proceeds will be set aside for strategic investments and acquisitions, uCloudlink said.

The mission of uCloudlink: "to enable people to use mobile data traffic freely anytime, anywhere like breathing the air."

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