The last IPO of 2015 priced this week - 170 companies raised $30 billion this year.
On Thursday night, Yirendai priced, just the fifth Chinese company to price a US IPO this year, representing a 64% decline from the 14 Chinese companies that came public in 2014. None of the Chinese IPOs from 2015 would even make the top ten Chinese companies by proceeds raised in 2014. Eleven Chinese companies raised over $100 million last year; only Baozun crossed that threshold in 2015, raising $110 million in a May offering. This week, Yirendai raised $75 million, bringing the total 2015 proceeds for US-listed Chinese IPOs to $292 million.
Yirendai (YRD), which is being spun out of CreditEase, provides a marketplace for peer-to-peer unsecured consumer loans in China. The company operates in an industry that has evolving regulations and over 2,000 competitors, but it has managed explosive growth nonetheless, growing revenue tenfold in 2014 and 2015 YTD. On Thursday, Yirendai priced its IPO at $10, the midpoint of the range, breaking issue in early trading and closing Friday down 9%, reflecting the difficult market conditions that have come to define the second half of 2015. Last December, On Deck Capital (ONDK) raised $200 million in its IPO, pricing above the range and popping 40% in its first day. Lending Club (LC) also priced above its range, raising $870 million and popping 56% in its debut. Like Yirendai, both companies are now trading below their offer prices; On Deck has fallen 53% and Lending Club has dropped -19%.
At its IPO price, Yirendai had a market cap of $585 million and an enterprise value of $490 million. Lufax (LFAX.RC), another Chinese peer-to-peer lender, recently completed a round of fundraising at an approximate valuation of $18 billion, securing its place as the world’s most valuable financial technology startup. China Rapid Finance (CRFIN.RC), a Chinese consumer lending marketplace, raised $35 million in a Series C round in July, valuing the company at $1 billion.
| 5 US-listed Chinese IPOs in 2015 | |||||
| Company (Ticker) | Business | Deal size ($mm) | IPO price vs. midpoint | 1st-day pop | Return at 12/18 |
| Baozun (BZUN) | E-commerce and logistics services | $110 | -23.1% | 4.4% | -11.4% |
| Yirendai (YRD) | Peer-to-peer lending marketplace | $75 | 0.0% | -9.0% | -9.0% |
| Jupai (JP) | Wealth management services and products | $53 | -9.1% | 10.8% | -6.0% |
| WoWo (WOWO) | Online mall connecting merchants and consumers | $40 | 0.0% | 2.9% | -44.5% |
| Yulong Eco-Materials (YECO) | Producer of fly-ash bricks and concrete | $14 | -7.4% | -1.3% | -38.6% |
IPO Market Snapshot
In 2015, 233 companies filed for IPOs, easily replacing the 170 that came public. However, the total is -36% below the 364 companies that filed in 2014. The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 8.6% year-to-date, compared to -2.6% for the S&P 500. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 4.2% year-to-date, compared with -8.5% for the ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include Recruit Holdings and NN Group.
