DeHeng Advised Ming Yuan Cloud Group on HKEX Listing

2020-09-25

On September 25, 2020, Ming Yuan Cloud Group Holding Limited went public on the main board of the Stock Exchange of Hong Kong with the stock code of "0909.HK". It made the largest ever IPO in the Chinese software and cloud service industry. The global offering is priced at HKD 16.50 per share, issued about 374 million shares before the over-allotment option was exercised, and raised net proceeds of HKD 5.906 billion. On the first day of trading, Ming Yuan Cloud opened at HKD 25.8 and closed at HKD 30.7 per share, an increase of 86.06% from the offering price, and its closing market value reached HKD 57.44 billion.

Founded in 2003, it focuses on providing enterprise-level ERP solutions and SaaS products for Chinese real-estate developers and other market players in the real estate industry chain. According to Frost & Sullivan's statistics, it is the largest software solution provider for Chinese real estate developers, accounting for 18.5% of the market share when calculated based on its revenue in 2019. In the past three fiscal years of 2017, 2018 and 2019, its operating income stood at 580 million yuan, 913 million yuan and 1.264 billion yuan, with the corresponding net profit of 72.802 million yuan, 163 million yuan and 232 million yuan, respectively. The compound growth rate of revenue from 2017 to 2019 reached 47.7%, and that of net profit was as high as 78.4%.

Some well-known funds were introduced as cornerstone investors and subscribed for the offering: Hillhouse Capital, Government of Singapore Investment Corporation (GIC), China Structural Reform Fund Corporation Limited, Sequoia Capital, BlackRock Funds and Fidelity International.   

As the issuer's domestic counsel, the DeHeng team was led by partner Liu Zhenguo, with primary support from on-site lawyer Zheng Jie, lawyers Sui Xiaojiao and Chen Hongyu, and trainee lawyer Li Rui. Since November 2018 they have provided whole-process professional legal services for the issuer's red-chip restructuring, pre-IPO financing and the IPO. Partner Ji Shujuan and her team also advised the issuer on overseas transaction for pre-IPO financing. The DeHeng lawyers worked closely with the issuer and its overseas counsel, sponsors and their domestic and overseas counsels. Their solid work, efficiency, and professional and high-quality services won high recognition and trust from the client and other intermediaries. 

▲DeHeng lawyers invited to the IPO ceremony