YY IPO to watch: According to the IPO (initial public offering) registration statement filed by YY Inc to the SEC (Securities and Exchange Commission) on October 15, 2012, the company has proposed to list its ADSs (American Depositary Shares) on the Nasdaq Stock Exchange under the symbol “YY.” Holders of Class A common shares are entitled to one vote per share. The company has proposed a maximum aggregate price of $100 million for its public offering but has not disclosed the specific YY IPO price range.
Net proceeds collected from the sale of ADSs in YY IPO will be used to fund the investment and further development of the voice and video technology and infrastructure; to fund for the sales and marketing activities and for other general corporate purposes. The company will not receive any of the proceeds from the sale of ADSs by the selling shareholders.
YY Inc operates a social platform that provides users real-time online interactive services through voice, text and video. The company’s core product, YY Client, has a user base of 400.5 million as of September 30, 2012.
According to the regulatory filing, YY Inc reported significant growth over the past years. The company recognized RMB32.7 million, RMB128.3 million and RMB319.7 million in net sales for the year 2009, 2010 and 2011, respectively; for the first half of year 2012, the company’s net sales reached RMB324.5 million, surging 173.2% from RMB118.8 million for the same period last year. The company incurred net losses of RMB47.1 million, RMB238.9 million and RMB83.2 million for the year 2009, 2010 and 2011, respectively; and realized a net income of RMB20.8 million for the first half of this year. On the adjustment and non-GAAP basis, the company reduced net loss from RMB10.6 million in 2009 to RMB1.9 million in 2010, and turned to a net income of RMB51.8 million in 2011. The first half 2012 adjusted net income was RMB75.1 million versus an adjusted net loss of RMB3.3 million a year ago.
The underwriting syndicate of YY IPO includes Morgan Stanley & Co. International plc, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Pacific Crest Securities LLC and Piper Jaffray & Co.
If YY successfully lands on the Nasdaq, this will be the first Chinese Internet company gets through the U.S. IPO market and will bring about pole significance to China’s internet industry.
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