Quantgroup to raise $20.7 million in share placement at 15% discount

E-commerce platform operator Quantgroup Holding Ltd. (2685.HK) said on Wednesday it plans to place up to 48.53 million new shares at HK$3.40 each, representing a 15.32% discount to the previous day’s closing price of HK$4.015. The new shares will account for about 8.54% of its enlarged issued share capital, with net proceeds expected to total about HK$162.6 million ($20.7 million).

The company plans to use 55% of the proceeds for its e-commerce business, including traffic acquisition, user operations and supply-chain payments. Another 15% will go toward R&D, with the remaining 30% for general working capital. The company said proceeds from its IPO latest last year were relatively limited, and the latest placement would help replenish its working capital and strengthen its financial position.

Quantgroup’s revenue fell 14% year-on-year to 437 million yuan in the first half of this year, while its net profit plunged 78.5% to 29.52 million yuan. Its cash stood at about 123 million yuan at the end of the period, down from 524 million yuan at the end of last year, while its net cash used in operating activities totaled 423 million yuan.

The company completed another new share placement in July, raising about HK$59.7 million. About HK$56.7 million of that remained unused at the end of August.

Quantgroup’s shares opened lower on Thursday and traded at HK$3.935 by the midday break, down 1.99%. The stock has fallen 85% so far this year.

By Lee Shih Ta

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