Online parenting platform Babytree makes Hong Kong debut

Alibaba-backed online parenting platform Babytree edged up on its debut in Hong Kong on Tuesday. 

Shares opened at HK$6.91 (88 US cents) on the Hong Kong Stock Exchange Tuesday morning after the IPO raised US$217 million by selling about 250 million shares at HK$6.80. It closed the day's trading at HK$6.87. 

Babytree has 200 million monthly active users on its online parenting information platform.

In the first half, Babytree reported 408 million yuan in revenue, up 12.6 percent from a year ago, thanks to income from advertising, e-commerce and paid online lessons. The net loss was 2.1 billion yuan compared to 388 million yuan a year ago. 

The company says it plans to use the proceeds for technology upgrades, potential mergers and acquisitions, as well as overseas expansion. 

Last year it also set up a joint venture with NASDAQ-listed Mattel to co-develop physical learning centers across China. 

Founder and chief executive officer Wang Huainan said: "We will stick to our core business as well as strategic opportunities in the future, and always keep in mind users' demands to become a leading player in the global parenting service sector." 

Director Cao Lei at the China E-commerce Research Center said that parenting demand has been booming in recent years, and Babytree's online platform offers one-stop service and networking for parents. 

“As younger parents are increasingly reliant on Internet platforms for educational services and information, online parenting information and service providers have a unique growth opportunity in the coming years," Cao noted.  

By the end of this year, China's online parenting and maternity e-commerce market size is expected to reach 747 billion yuan. 

Babytree was eyeing a listing in September but changed the timetable due to lukewarm market sentiment amid a sell-off in global equity markets. 

Earlier this month, the company cut down its offering size from the originally planned US$1 billion. Morgan Stanley, Haitong International Securities Group and China Merchants Securities are acting as sponsors for the offering.

Some of the new listings in Hong Kong are trading below their initial prices as investors are cautious over geopolitical uncertainties.