Chinese internet giant NetEase, Inc. (NTES) has now announced the pricing of its global offering of 171.48M new ordinary shares at HK$123 per share.
Based on the ratio of 25 ordinary shares per Nasdaq-listed American depositary share (ADS), this translates to approximately $397 per ADS.
According to NetEase, this price is based on the closing price of the ADSs on June 4, 2020 (the latest trading day before pricing).
The global offering is made up of an International Offering of 166.3M shares and a Hong Kong Public Offering of 5.15M shares.
Subject to approval from The Stock Exchange of Hong Kong Limited, NetEase shares are expected to begin trading on the exchange’s main board on June 11, 2020 under the stock code “9999.”
The international offering is expected to close on the same day, subject to customary closing conditions.
NetEase is looking for gross proceeds from the global offering, before underwriting fees and offering expenses, of approximately HK$21,092 million.
These funds will be used for globalization strategies and opportunities, fueling continued pursuit of innovation, and general corporate purposes, says the company.
In addition, NetEase has granted the international underwriters an over-allotment option, from June 5, 2020 for 30 days, for an additional 25,722,000 new shares at the offer price.
CICC, Credit Suisse and J.P. Morgan are the joint sponsors and joint global coordinators for the offering.
Shares in NetEase have soared 39% year-to-date and are currently trading at $425. Analysts have a bullish Strong Buy consensus on the stock’s prospects with 7 recent buy ratings vs just 1 hold rating. Meanwhile the average analyst price target of $449 indicates 6% upside potential from current levels. (See NTES stock analysis on TipRanks).
Benchmark’s Fawne Jiang recently ramped up her NTES price target to $435 from $380 following strong earnings results, citing increased game growth during the coronavirus pandemic. With multiple new games on the horizon and strong in-home entertainment trends, Jiang expects the company’s momentum to continue.