Atour Lifestyle Holdings Ltd. (ATAT), a leading midscale hotel chain in China, flew first class in its NASDAQ debut on Friday (Nov. 11, 2022). Atour’s stock soared 41 percent to open at $15.50 – up $4.50 from its $11.00 IPO price – in its opening trade at 10:33 a.m. EST on Friday, NASDAQ records showed, on volume of 60,553 shares. The stock flew to an intraday high of $17.05, hit an intraday low of $12.00, and closed at $12.88 – up $1.88 or 17.1 percent from its IPO price – on volume of 1.84 million shares.
Atour Lifestyle’s Cayman Islands-incorporated holding company was the entity issuing the stock in the IPO. In this case, Atour Lifestyle’s IPO consisted of 4.75 million American Depositary Shares (ADS) priced at $11.00 – the low end of its $11.00-to-$13.00 range – to raise $52.25 million. The IPO was revived this year. Its new size represented a cut of nearly 80 percent from its initial terms in 2021, when the deal stalled amid China’s crackdown on Chinese companies’ U.S. IPOs.
Pandaily says that Atour Lifestyle Holdings Ltd. (ATAT) was the first Chinese company to issue ADS in an IPO since ride-hailing company Didi went public on June 30, 2021.
BofA Securities, Citigroup, CICC and CMB International (affiliated with China Merchant Bank) were the joint book-runners.
The timing turned out to be right for Atour Lifestyle’s U.S. IPO. The pricing date was accelerated by a day to Thursday night – coming right on the heels of the U.S. stock market’s best day since 2020.
The Dow Jones Industrial Average shot up 1,201.43 points, or 3.7 percent, on Thursday to close at 33,715.37 on Thursday (Nov. 10, 2022) – after the October CPI showed an unexpected cooling in inflation. The NASDAQ Composite index surged 760.97 points, or 7.4 percent, to end at 11,114.15, while the S&P 500 jumped 207.80 points, or 5.5 percent, to finish at 3,956.37.
“All three benchmarks scored their steepest one-day percentage gains since the depths of the coronavirus pandemic in 2020,” The Wall Street Journal reported.
Atour Lifestyle made its NASDAQ debut on the same day that news from China was positive, as this MarketWatch headline (Friday, Nov. 11, 2022, at 10:23 a.m. EST) shows:
Atour’s stock started trading on NASDAQ 10 minutes after this headline appeared. (Similar headlines had appeared earlier on Nov. 11 from various financial news outlets.)
Cornerstone investor Snow Lake Capital had indicated interest in buying up to US$10 million in Atour Lifestyle’s IPO, according to the prospectus.
Stocks extended their rally for a second day on Friday. The Dow gained 32.49 points, or 0.1 percent, to end at 33,747.86. The NASDAQ Composite Index soared 209.18 points, or 1.9 percent, to finish at 11,323.33, scoring its biggest two-day gain since November 2008, according to The Wall Street Journal. The S&P 500 advanced 36.56 points, or 0.9 percent, to close on Friday at 3,992.93.
For the week, the Dow was up 4.1 percent, while the NASDAQ was up 8.1 percent and the S&P 500 was up 5.9 percent. This was the NASDAQ’s best performance since March, and the S&P 500’s best performance since June, according to The WSJ.
The two-day rally helped offset Wednesday’s ugly plunge by the stock market.
Atour Lifestyle, incorporated in the Cayman Islands, is the holding company of the Shanghai-based hotel chain. In the prospectus, the company described itself as “the largest upper midscale hotel chain in China in terms of room number as of the end of 2020, according to Frost & Sullivan.”
Here’s Atour Lifestyle by the numbers, according to the prospectus: “As of June 30, 2022, our hotel network covered 834 hotels spanning 151 cities in China, with a total of 96,969 hotel rooms.” The company also said it has “a pipeline of 343 hotels with a total of 37.795 rooms under development.”
Atour Lifestyle’s revenues and profits appealed to IPO investors.
For the year ended Dec. 31, 2021, Atour Lifestyle Holdings reported net income of US$20.39 million on revenue of US$337.0 million.
Atour’s hotels cater to China’s growing young middle class – Millennials and Gen Z consumers. The company offers easy room booking options and an in-room shopping service.
“Our guests can book a stay with us and access our rich product and service offerings through offline and online channels, including our mobile app and Weixin/WeChat mini program,” the prospectus says.
The performance of Atour Lifestyle’s IPO turned out to be the bright spot for the IPO market this week.
Two biotech deals – Acrivon Therapeutics (ACRV proposed) and Intensity Therapeutics (INTS proposed) – did not get done.
Two micro-cap IPOs – ASP Isotopes (ASPI) and Snail, Inc. (SNAL) – were priced. Their stocks sank in their NASDAQ debuts.
Plutonian Acquisition Corp. (PLTNU), a SPAC IPO was priced. Its stock edged higher on the NASDAQ.
Next week, two tiny deals – both carry-overs – are on the IPO Calendar. One is an IPO. The other is a NASDAQ uplisting.
The SEC was closed on Friday, which was Veterans Day, Nov. 11, 2022.
When the SEC re-opens for business on Monday morning, Nov. 14, 2022, more names could slide onto the IPO Calendar.
Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board.
To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message.
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