Tencent-backed Beike Raises $2.12B in US IPO

Zuo Hui, chairman and co-founder of Beike Zhaofang (Source: Beike)

KE Holdings Inc., better known by its housing transactions platform Beike Zhaofang, sold $2.12 billion worth of shares on Thursday in a US initial public offering.

Backed by Tencent Holdings Ltd. and SoftBank Group Corp., the Chinese real estate company sold 106 million American depositary shares (ADS), each representing three Class A ordinary shares of the company, priced at $20 per share, above its proposed price range of $17 to $19. Its stock will start trading later on Thursday on the New York Stock Exchange under the symbol “BEKE.” The offering is expected to close on Aug. 17, subject to customary closing conditions.

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The IPO is the largest float by a Chinese company on US exchanges since online video platform iQIYI Inc. raised $2.4 billion in March 2018.

Goldman Sachs (Asia) L.L.C., Morgan Stanley & Co. LLC, China Renaissance Securities (Hong Kong) Limited, J.P. Morgan Securities LLC, and China International Capital Corporation Hong Kong Securities Limited were joint underwriters of this offering. UBS Securities LLC, CLSA Limited, Credit Suisse Securities (USA) LLC, and CMB International Capital Limited were co-managers for the deal.

The Beijing-based company said the raised proceeds will be used to expand the company’s home transaction services, to diversify its services, and for research and development as well as general corporate purposes.

“We founded our company with the belief that we can transform the housing transactions and services industry in China by improving the quality and efficiency of service providers and enhancing customer experience,” KE Holdings said.

Launched in 2018 by China’s biggest real estate firm Beijing Homelink Real Estate Brokerage Co., which is known as Lianjia in China, Beike raised about $800 million from Tencent in a D+ round of financing in November last year while SoftBank invested $1.3 billion at a $10 billion valuation, Bloomberg reported.

The company reported net profits of $227.5 million and revenue of $1.77 billion in the first half of 2020.