HONG KONG â€" The latest Chinese technology company to seek a stock market listing in the United States comes with heavyweight backers and is a rare attempt at an offering by a parent company already listed in Hong Kong.
On Thursday, Kingsoft Corporation, a Chinese software company listed in Hong Kong, announced that its subsidiary, Cheetah Mobile, had filed for an initial public offering in the United States.
Cheetah, which develops Internet security software, said in a filing on Wednesday with the United States Securities and Exchange Commission that it may seek to raise $300 million, a figure that may change and was disclosed for the purpose of calculating registration fees. Cheetah did not indicate whether it planned to list on the New York Stock Exchange or the Nasdaq.
Coming amid a number of tremendously successful Chinese technology I.P.O.s in the United States, Cheetah’s planned offering stands out on several fronts. The company’s biggest backers are Lei Jun â€" a billionaire software and smartphone entrepreneur who has been known to style himself after Steven P. Jobs, the founder of Apple â€" and Tencent, a Chinese online video game and social networking company with a market value of about $130 billion.
It is also uncommon for a company listed in Hong Kong to seek a new listing for a business in the United States. In doing so, Cheetah plans to adopt a two-tiered shareholding structure that would give the company’s founders a disproportionate say over the way the company is run.
While Hong Kong’s stock market regulators have frowned on such structures, similar arrangements are common in the United States, especially among technology companies such as Google, which is creating a new class of shares with no voting rights â€" or Facebook. Partly as a result of this stance, Alibaba, the Chinese e-commerce giant, has chosen the United States over Hong Kong for an I.P.O. that analysts expect will surpass Facebook’s $16 billion offering two years ago.
Cheetah has developed a number of mobile apps and computer programs that block viruses, remove unwanted files and generally improve security. It boasted a total of 329.5 million monthly active users as of December. Last year, it made a profit of 62 million renminbi, or about $10 million, on revenue of 750 million renminbi.
Cheetah’s I.P.O. consists of new shares representing a 15 percent stake. Based on the preliminary $300 million deal size, the offering would value the company at $2 billion â€" or about 200 times last year’s earnings.
Kingsoft, whose stake in Cheetah is to be diluted to 47 percent from 54 percent after the sale, trades in Hong Kong at about 42 times its historical earnings and has a market value of just under $5 billion.
Mr. Lei, whose separate smartphone business, Xiaomi, is targeting sales of 60 million units this year and 100 million next year, personally owns about 27 percent of Kingsoft, meaning he stands to make a significant profit if the Cheetah I.P.O. goes ahead as planned. So too would Tencent, which began investing in Cheetah in 2011 and owns an 18 percent stake.
Shares in Kingsoft have rallied, partly in anticipation of the planned sale of Cheetah. The stock has nearly quadrupled over the past 12 months and is up 40 percent so far this year.
Morgan Stanley, JPMorgan and Credit Suisse are the main underwriters of the deal.
