Chinese IPOs Qilian and Kuke Music Jump in Trading Debuts

The two offerings continue the trend of Chinese companies going public in the U.S. There were 33 Chinese offerings in 2020, collecting $13.4 billion, the most since 2018, when 34 Chinese companies went public, according to Dealogic. The $13.4 billion compares with the $3.5 billion raised by 25 IPOs in 2019.

Qilian’s (ticker: QLI) stock opened at $8.01 and hit a high of $22, up 340%. The stock changed hands at $14.04 shortly after midday.

The company’s soaring debut is significant because Qilian has been waiting a long time to go public, initially filing for an IPO in November 2019. When Qilian finally did price its offering, the company raised $25 million after selling 5 million shares at $5 each, the low end of the range of $5 to $7 investors had been told to expect.

Univest Securities, Loop Capital Markets, and Alexander Capital are underwriters on the deal.

According to Qilian’s prospectus, sales at the pharmaceuticals and chemicals company fell 31% in the three months ended Sept. 30 as a result of the pandemic. Net income declined 17%, to $4.2 million, for the six months ended March 31 from $5 million for the same period in 2019. Revenue rose 2%, to $27.8 million, the prospectus said.

The company employs 288.

Kuke (KUKE) also began trading Tuesday. Shares opened at $10.50 and hit a high of $15.06 before slipping back to change hands at $11.73, up 17%.

Kuke raised $50 million Tuesday, selling 5 million American depositary shares at $10 each, the bottom of the range of $10 to $12 it had told investors to expect.the low end of the range. Each ADS represents one class A ordinary share.

Deutsche Bank, US Tiger Securities, Inc., and AMTD Global Markets are underwriters on the deal.

Kuke, which is based in Beijing, provides classical music licensing and subscription and education services in China, where it is looking to gain from growth in the classical music market. It has one of the largest classical music libraries, including about 1.8 million tracks.

Customers include online music entertainment platforms, such as Tencent Music Entertainment Group (TME); digital music service providers, such as NetEase Cloud Music (NTES); film and TV production companies; airlines; and smart hardware companies.

Like Qilian, Kuke took a hit from the pandemic. The virus disrupted the public bidding process that Chinese public schools, universities and libraries take part in to purchase music subscription services, as well as Kuke smart pianos and Kuke smart music teaching systems, its prospectus said.

Covid-19 also severely negatively affected many of Kuke’s content providers, which resulted in the cancellation of music recording activities and live classical music performances. This hampered Kuke’s ability to maintain and expand its content offerings.

Kuke is not profitable. Losses widened to nearly 60 million yuan ($8.6 million) for the nine months ended Sept. 30 from a loss of 702,000 yuan ($108,579) for the same period in 2019. Revenue dropped nearly 15%, to 35 million yuan ($5 million) in revenue. Kuke had 108 employees, all based in China, as of the end of 2019, the prospectus said.

Write to Luisa Beltran at luisa.beltran@dowjones.com