Huafang Group Eyes Hong Kong IPO, Revenue in First Eight Months Nears $470 Million

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(Source: Insurance Journal)

According to HKEx disclosures on Monday, Huafang Group Inc. submitted a prospectus to be listed on the exchange’s main board. CCB International and Haitong International are co-sponsors of the company.

The prospectus shows Huafang Group focuses on online social entertainment, and has a diversified business portfolio from live streaming to a series of multi-faceted audio and video social network products and services. Its main products include 6.cn, Huajiao, and HOLLA.

Among them, Huajiao is the mobile flagship product launched by Qihoo 360 Technology Co. Ltd. in May 2015. At the beginning of its establishment, the company was vigorously promoted by Qihoo 360 Chairman Zhou Hongyi.

6.cn runs on PCs while also available as a mobile application. HOLLA is a video chat product, targeting European and North American markets, providing social and video chat services.

As of August 31, 2021, Huajiao had about 10.1 million registered hosts and has seen more than 200,000 average monthly active hosts.

In terms of the company’s shareholder structure, Zhou Hongyi holds 38.21% of shares through several companies, making him the largest shareholder, while Songcheng Holdings has a 37.06% stake of the company’s shares through its wholly-owned subsidiary Global Bacchus Limited, making it the second largest shareholder.

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According to the prospectus, the revenue of Huafang Group mainly comes from user contributions and other services of the live-streaming platform. From 2018 to 2020, the revenues of Huafang Group were 1.993 billion yuan ($312.18 million), 2.831 billion yuan and 3.683 billion yuan respectively. The company’s revenue in the first eight months of 2021 was 2.96 billion yuan.

In terms of profitability, the adjusted net profit of Huafang Group has turned positive since 2019. In the first eight months of 2019, 2020 and 2021, it was 211 million yuan, 367 million yuan and 260 million yuan respectively.