Hillhouse, Tencent-backed snack maker Weilong relaunches $500m HK IPO

Weilong Delicious Global Holdings Ltd has renewed its draft prospectus as the Chinese spicy snack maker prepares to relaunch an initial public offering (IPO) to seize the opportunity of recovering investor appetite for new shares.

Henan-based Weilong refiled a preliminary prospectus on Monday evening in its third attempt to launch an IPO in Hong Kong. The filing does not contain any offering details, but Bloomberg earlier reported that it could raise about $500 million, citing sources familiar with the matter.

The latest attempt comes after Weilong first filed for a public listing in May 2021 to raise as much as $1 billion. However, its plan was shelved like that of other companies such as Apple’s supplier Biel Crystal Manufactory due to the global market slowdown.

Weilong later renewed the application in November 2021 which also lapsed this May.

The stock exchange in Hong Kong requires a renewed application and a fresh listing fee if more than six months have elapsed since a listing application.

Weilong may launch the IPO in the second half of 2022, but discussions are ongoing. Details of the listing size and timing could change, sources told Bloomberg.

Before it launched the listing plan, Weilong raised 3.56 billion yuan (about $531.1 million) in a Series A round, which was also its first and only venture round led by China’s CITIC Private Equity (CPE) and Hillhouse Capital Group. It is said to reach a valuation of 70 billion yuan ($10.4 billion) after the deal, according to Chinese media outlet 36Kr.

Chinese Internet gaming and social media giant Tencent, Alibaba’s Jack Ma-backed Yunfeng Capital, and Sequoia Capital China were among investors in the deal.

Founded in 2001, Weilong is the largest player in China’s spicy snack food market with a 6.2% market share. The value of its retail sales in 2021 was nearly four times that of its biggest competitor, said the firm in the prospectus, citing data from market researcher Frost & Sullivan.

Its net profit increased by 1% year-over-year (YOY) to 826.7 million yuan ($123.3 million) in 2021, after a 24.4% surge in the previous year, according to its updated filing.

CICC, Morgan Stanley and UBS are the joint sponsors of the deal.

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