China Literature to launch $1.1 billion Hongkong IPO

China's largest e-book retailer and publisher, China Literature, began a roadshow for its initial public offering on October, hoping to raise up to $1.07 billion, reports the Reuters.

China's largest e-book seller and publisher China Literature launches its IPO roadshow on Monday, hoping to raise $1.07 billion. [File Photo: VCG]

The company, which is 62% owned by China's internet giant Tencent, is offering 151.37 million shares in Hong Kong in a range of HK$48 to HK$55 each.

The new shares would be the equivalent of 16.7 percent of China Literature's enlarged share capital, putting its market capitalization at around $6.4 billion.

The money will be used to fund acquisitions and expand the company's digital publishing business, reports Reuters.

The IPO is reportedly being backed by Bank of America-Merrill Lynch, Credit Suisse and Morgan Stanley.

China Literature maintains a platform 9.6 million online books by 6.4 million authors.

The division of Tencent earned a net profit of $32.2 million through the first six months of 2017.

This compares to net loss of around $400,000 through 2016.

The turnaround is being credited to the company's new promotion strategy for its online works.

Fans of "The King's Avatar," or "Quanzhi Gaoshou," attend a book signing by Butterfly Blue, the writer of the novel, in Beijing, July 7, 2017. [Photo: IC]

"The King's Avatar," or "Quanzhi Gaoshou," is viewed as a prime example of this.

The web novel has been viewed 23.7 million on qidian.com, one of China Literature's flagship online reading platforms.

Fans of "The King's Avatar," or "Quanzhi Gaoshou," dress up as characters from the novel in Beijing, August 11, 2017. [Photo: IC]

China Literature's IPO roadshow is expected to run until October 31, with its first day of trading in Hong Kong tentatively set for November 8.