Meet UCloud, First Company with WVR Structure on Shanghai Bourse
The Infrastructure as a Service (IaaS) provider's IPO application was approved by the Star Market Listing Committee. More than half of the firm’s employees are involved in R&D.
UCloud Technology Co., Ltd. (优刻得, A19019:SH), a Shanghai-based infrastructure software provider, was finally accepted to list the stock of the Star Market on September 29. This is the first company in the new tech venue that will trade shares with weighted voting rights (WVR).
Listings with WVR structure, also known as dual-class shares, is a practice adopted from the Hong Kong exchange, which started experimenting with this type of stock in April 2018. Xiaomi (1810:HK) became the first enterprise to go public on the island under this standard, bagging HKD 42.6 billion (USD 5.43 billion) in last July. Designed for innovative tech companies, founders of which are eager to raise capital without losing actual control, the new standard surprisingly hasn’t gone viral.
Read more about the listing standards for stocks with WVR structure on the fresh Shanghai marketplace in the recent EqualOcean report (download).
According to the materials published by the Listing Committee, the market watchdog has asked the firm to disclose additional information regarding its market share change over the past several years. Worth mentioning that UCloud’s operating income skyrocketed from 2016’s CNY 516.47 million (USD 72.51 million) to CNY 1.19 billion (USD 167.07 million) in 2018.
What’s more, the bourse has stated that the company has to increase a degree of transparency by making public its short-term development plan. Some concerns about cost optimization and market positioning were raised as it might be hard for a small-sized cloud service provider to maintain buoyancy on the highly competitive scene filled with digital giants such as Alibaba (BABA:NYSE) and Tencent (0700:HK).
With over 80,000 users across the country, UCloud provides a gamut of independently developed cloud computing products. Besides ‘Infrastructure as a Service’ (IaaS) and ‘Platform as a Service’ (PaaS) solutions, the firm makes attempts in the field of Artificial Intelligence (AI).
The company has undertaken five rounds of financing to date. There are several big names in the diverse list of its investors. For example, locally famous private equity firm Legend Capital led a USD 50 million Series B round of funding, which also saw participation from global venture capital organization DCM and fund management company Bertelsmann Asia Investments (BAI) in June 2014.
In its last (Series E) investment round that took place on June 28, 2018, UCloud nabbed hundreds of millions of yuan from mobile telecommunication company (MTC) China Mobile (CHL:NYSE). This time, the firm intends to issue up to 485 million shares. Other details should be determined in two weeks, according to the new board's regulations.
Software companies have recently poured into the Shanghai sci-tech venue. Kingsoft Office (A17055:SH), a Chinese nemesis of Microsoft in the office software field, got approved this week as well and is now preparing its stock to trade.