Kingsoft Cloud Raises $510 Million in Upsized IPO Amid Luckin

Crystal Tse and Julia Fioretti (Bloomberg) -- Kingsoft Cloud Holdings Ltd. raised $510 million after pricing its upsized U.S. initial public offering, the first U.S. listing of a Chinese company since the fallout from the accounting scandal at Luckin Coffee Inc.

The affiliate of Hong Kong-listed Kingsoft Corp. sold 30 million American depositary shares at $17 each, Kingsoft said in a stock exchange filing on Friday. The Beijing-based cloud computing service company initially marketed 25 million shares at $16 to $18 each, according to a filing with the U.S. Securities and Exchange Commission.

Kingsoft Cloud’s U.S. share sale is the biggest by a Chinese company this year, according to data compiled by Bloomberg. It’s a tricky time for Chinese companies listing in the U.S. after the poster child of Chinese startups, Luckin, was accused of accounting fraud. Luckin’s shares had fallen 74% from its IPO price last year when trading of its stock was suspended in April.

It also comes at a tense moment for the U.S.-China relationship as President Donald Trump and Chinese state media exchange heated criticisms regarding the origin of coronavirus responsible for the pandemic that has killed more than 269,000 and brought much of the world’s economy to a standstill.

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Kingsoft Cloud is the third biggest cloud services provider in China by revenue with a market share of 5.4%, according to a filing. Last year, it lost $160 million on revenue of $568 million. Its chairman, Lei Jun, was a co-founder of smartphone-maker Xiaomi Corp., which will own about a 14% stake in the company after the offering, according to the filing.

The company told prospective investors that it planned to price the share sale in the upper half of the marketed range as the deal draws significant interest, Bloomberg News reported on Thursday.

The offering is being led by JPMorgan Chase & Co., UBS Group AG, Credit Suisse Group AG and China International Capital Corp. The company’s shares are expected to trade on the Nasdaq Global Select market under the symbol KC.