Alibaba-backed Babytree files prospectus for Hong Kong IPO

Chinese online parenting services platform Babytree Inc. has filed its prospectus for an initial public offering in Hong Kong. The joint sponsors are Morgan Stanley, Haitong International and China Merchants Securities International, the chief financial advisor is UBS, and the joint financial advisor is Fosun Hengli.

Established in 2007, Babytree has continuously reformed from a maternal and baby service community to an Internet tool and social e-commerce platform with the consumption upgrades of Chinese families. The company has created C2M and health business models. In June 2018, Babytree entered strategic cooperation with Alibaba and online children English education brand VIPKID.

Babytree's prospectus shows that the company realized annual operating revenue of RMB 200 million, RMB 509 million and RMB 729 million from 2015 to 2017, with gross profit margin of 54.6%, 53.1% and 63.2% respectively. The company made losses of RMB 286 million (2015), RMB 934 million (2016) and RMB 911 million (2017) in the past three years. The adjusted losses were RMB 172 million (2015), RMB 44 million (2016) and RMB 138 million (2017).

Babytree's main shareholders are Alibaba, Fosun, TAL Education and Jumei International Holding. The company’s largest shareholder is the founder Wang Huainan’s family, who holds a 26.09% stake; Fosun is the second largest shareholder with 24.84% stake; TAL Education holds 10.18% and Alibaba holds 9.9%.

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