Introduction: Recently, Hong Kong investment bank Shangcheng International's IPO in the United States has attracted industry attention. Shangcheng Group is a little unfamiliar, but the shareholders behind it are not ordinary. Hong Kong rich man Li Ka-shing Cheung Kong Group , one of the four major families in Hong Kong, Kwok's Sun Hung Kai Group, as well as Xiaomi, Tongcheng Yilong, etc. are all its shareholders. Some commentators said this is a feast for the rich family (Old Money) and the new technocrat (New Money).
On July 25, Shangcheng International submitted a prospectus to the US Securities and Exchange Commission (SEC). According to the prospectus, Shangcheng International expects that the IPO issuance price of US$810-8.48, and plans to issue approximately 20.76 million ADS (American depositary shares). According to this calculation, Shangcheng International's highest fundraising amount is US$176 million.
According to the prospectus, 50% of the funds raised by Shangcheng International will be used for business and infrastructure expansion, including the establishment of new subsidiaries and the application of new business licenses; about 30% will be used to fund potential acquisitions and investments in complementary businesses, and the remaining will be used for general company operations.
Perhaps for mainland investors, Shangcheng Group is a little unfamiliar with it, but the shareholders behind it are extraordinary. One of the founding shareholders of Shangcheng Group is the Cheung Kong Group, a subsidiary of Li Ka-shing, known as the richest Chinese in Hong Kong. In addition, Insight Fintech , one of the Hong Kong virtual bank licenses in May this year, was jointly established by Shangcheng Group and Xiaomi Group . According to relevant information, Shangcheng Group also introduced investors such as Xiaomi Group , Tencent concept stock Tongcheng Elong in its last round of financing before listing.
The current wealth discourse system is divided into Old Money and New Money. Shangcheng International went public in the United States this time, and behind it is a feast that combines the wealthy family (Old Money) and the new technology newcomer (New Money).
//Pre-IPO Rich and Yunji //
Shangcheng Group was founded in 2003. Its main shareholders are the famous Cheung Kong Hutchison Industrial, Morgan Stanley , and Sun Hung Kai Group and Rich and Rich International, which are among the top four Hong Kong investment companies.
Before going public in the United States, many new economy companies, well-known wealthy families in Hong Kong participated in Shangcheng International's Pre-IPO. It can be said that at this point, the wealthy families have become more and more closely connected with the technological upstarts. Among them, new economy companies include Xiaomi, Tongcheng Elong and Meitu Cai Wensheng Longling Investment. In addition, also includes Qiu Dachang ( Malaysia Tan Sri Datuk), Sun Hung Ki Lee Myung family, Li Chenghuang family, Rich Hotel Group Luo family, "Father of Red Chip" Liang Botao and other Hong Kong rich families participated.
According to the official website information, Shangcheng Group is an Asian securities service platform and cross-border investment bank, which is mainly divided into four major businesses: capital market and consulting, asset management, insurance brokerage, and strategic investment. According to the Assets Management (AUM) as of March 31, 2019, Shangcheng Group's asset management scale reached HK$20.8 billion (US$2.6 billion), and 24% of which belong to China regional banks and 71% belong to New Economy Companies.
For companies in charge of more than 20 billion Hong Kong dollars, the growth of Shangcheng Group is inseparable from the growth of China's corporate financing service demand. According to statistics, Chinese financial institutions and real estate developers raised funds through equity and bond financing in the Hong Kong capital market increased from US$51.1 billion in 2013 to US$113.7 billion in 2017, accounting for 30% of the market fundraising to about 49%. Moreover, due to the booming development of new economy companies, the growth potential in stock investment and equity capital markets has also created the current Shangcheng. Behind more than more mainland regional banks and new economy companies listed in Hong Kong in the past two years, Shangcheng Group is present, including Guangzhou Rural Commercial Bank, Qingdao Bank, etc., as well as new economy companies such as Xiaomi, Maoyan Entertainment, Tongcheng Elong .
However, Shangcheng International's performance in recent years seems to be a little unoptimistic. According to the financial report, in 2017-2018, Shangcheng International's revenue was HK$1.03 billion and HK$720 million respectively.
// Marriage "technology upstart" to open a virtual bank //
As early as 2000, the Hong Kong Monetary Authority 3 issued the "Recognition of Virtual Banks", but it was not until 2017 that the Hong Kong Monetary Authority officially promoted Hong Kong to a "new era of smart banking", and one of the measures was to introduce virtual banks in Hong Kong. For Hong Kong, which has a developed physical banking industry, virtual banks will help the popularization of financial innovation in Hong Kong. Up to now, a total of eight virtual bank licenses have been issued in Hong Kong. Behind these eight licenses are the figures of technology giants such as Alibaba, Tencent, , JD.com, , and Xiaomi. This license has also become a pass for various technology giants to plan in Hong Kong and move abroad.
In July last year, Xiaomi Group was listed on the Hong Kong Stock Exchange, becoming one of the top three global technology stocks in history. , Shangcheng Group serves as the joint lead underwriter, joint book manager and joint lead manager of Xiaomi Group IPO. So there is also a foundation for further cooperation in the future.
In May 2019, Shangcheng Group and Xiaomi jointly announced that the joint venture "Insight Financial Technology Company" was awarded a virtual banking license from the Hong Kong Monetary Authority . As we all know, Xiaomi is one of my country's Internet giants, while Shangcheng Group has the advantages of the financial market in Hong Kong. Under this big cake of Hong Kong's virtual banking market, the two sides hit it off.
Chairman and CEO of Shangcheng Group Cai Zhijian also said, "As a native financial institution in Hong Kong, Shangcheng will deeply link and cooperate comprehensively with Xiaomi to jointly build the most distinctive innovative bank in Hong Kong and contribute to promoting Hong Kong's financial technology transformation and smart city construction."
// Focus on the new science and technology economy //
Through the information above, it is not difficult to find that Shangcheng focuses on the new science and technology economy. In addition to Xiaomi mentioned above, in September 2017, Shangcheng had strategically invested in Dianrong, a financial technology company founded in China by Soul Htite, co-founder of Lending Club. Since then, Dianrong has helped Dianrong introduce Singapore government investment companies and other institutions, and has joined hands with Dianrong to incubate FinEX Asia, a financial technology market platform in Hong Kong. Its platform uses Dianrong's advanced technology to enable Asian investors to obtain a diversified investment portfolio including US consumer credit.
Screenshot Source: Company official website
In addition, Shangcheng has also jointly invested in the artificial intelligence technology company Appier with the Singapore Economic Development Bureau, Japan's SoftBank and Line. Shangcheng Group's investment portfolio also includes Shenzhou Youche, used car online trading platform Youche Eslite, student loan platform Credit Labs, American Internet education service company Peachjar and other companies.
In March 2018, Shangcheng Group announced a strategic investment in Royole Technology, and the two parties reached comprehensive strategic cooperation in the fields of financial cooperation, scientific and technological innovation, capital market, international development, etc.
