ChinData, the Chinese data center operator backed by private equity firm Bain Capital, has floated on the US stock market, raising $540 million.
The company, which makes the vast majority of its revenue from Tiktok's parent ByteDance, is now traded in the US, a country where ByteDance is under attack from the Government. The initial public offering (IPO) has been rumored since January, with a value for the total company varying between $1 billion and the figure of $4.9 billion quoted by Bloomberg yesterday. Forty million shares were sold on the Nasdaq at $13.50 a share, under the symbol "CD."
Tied in with ByteDance
ChinData is a hyperscale operator based in China, with ambitions across APAC, but earlier in September its filing with the Securities and Exchange Commission (SEC) revealed that 81.6 percent of its revenue comes from just one customer: ByteDance, the parent of TikTok and the subject of executive orders from Donald Trump.
ChinData was created in 2019 as a pan-Asian hyperscale data center operator, when Bain merged China's ChinData with Singapore-based Bridge Data Centres. With multiple campuses in China, the company has expanded into other countries. Bridge had acquired two data centers in Cyberjaya, Malaysia, and ChinData had said it would continue Bridge's plans to expand in India. Other markets in its sights have included Singapore, Australia, Japan, Hong Kong, Indonesia, and the Philippines.
"We have in the past derived, and believe that we will continue to derive, a significant portion of our revenues from a limited number of clients," said ChinData's SEC filing. "Revenues from ByteDance accounted for 68.2 percent and 81.6 percent of our total revenues in 2019 and for the six months ended June 30, 2020." That revenue came in at RMB581.8 million (US$82.3 million) and RMB661.5 million (US$93.6 million) respectively.
This revenue is for managing and customizing data centers for ByteDance in China so, according to ByteDance's statements, these facilities will be running Douyin, a video-sharing app only used in China, and not TikTok, the international app which has caused anger in the White House.
ByteDance is still under orders from the US Government to sell its US operations and President Trump has approved a deal whereby TikTok in the US (along with some other national operations under the same management), would be bought by Oracle and Walmart. China, meanwhile, has introduced new rules on the technology exports, designed to hinder the sale.
Following the IPO, the Group has granted underwriters (including Morgan Stanley, Citigroup, UBS Security, and China Renaissance Securities) an option to buy up to 6,000,000 additional shares within a month, according to the ChinData release. The shares on offer are American Depositary Shares (ADSs).