Tencent-backed online broker Futu rises in trading debut

[HONG KONG] Futu Holdings Ltd, the online Chinese broker backed by Tencent Holdings Ltd, jumped as much as 46 per cent after raising US$90 million in its US initial public offering (IPO).

The company sold 7.5 million American depositary shares at US$12 each, after marketing them at US$10 to US$12. The shares opened Friday at US$14.76 and closed up 28 per cent to US$15.32 in New York trading, giving the company a market value of US$1.7 billion.

Futu's first-day performance was the fifth best of the 21 US IPOs this year. Only seven other of those ended their first day of trading above their offer price.

The company, which helps Chinese investors trade overseas stocks, originally sought to raise about US$300 million when it filed confidentially for an IPO, people familiar with the matter said in October. The company is the fourth-largest online retail broker in Hong Kong based on revenue for the six months through June of last year, according to a filing with the US Securities & Exchange Commission. It brokered about US$116 billion in trades in 2018.

The company set its IPO target to US$130.8 million when it officially filed to go public in February. This week, it scaled back the size of the share sale after striking a deal to sell US$70 million in stock in a private placement to General Atlantic.

The listing is the latest in a wave by companies backed by Chinese tech magnate Pony Ma's Tencent, whose investment arm has stakes in more than 100 startups worth US$1 billion or more. Sixteen companies Tencent has invested in went public in 2018, a Tencent executive said in February.

Futu's share sale was arranged by Goldman Sachs Group Inc, UBS Group AG, Credit Suisse Group AG, HSBC Holdings Plc and BOCI Asia Ltd. The shares are trading on the Nasdaq Global Market under the ticker "FHL."

BLOOMBERG