Entering text into the input field will update the search result below

China-Based CLPS Files For $14 Million U.S. IPO

Apr. 11, 2018 1:21 PM ETCLPS Incorporation (CLPS)ACN, CAPMF, HPQ, IBM1 Comment


  • CLPS wants to raise $14 million in a U.S. offering of its common stock.
  • The firm provides outsourced IT software and services to legacy financial firms in China.
  • Management has grown revenues and earnings against a backdrop of increasing demand.

Quick Take

CLPS (NASDAQ:CLPS) intends to raise $14 million from the sale of its common stock in a U.S. IPO, according to an F-1 registration statement.

The firm provides legacy financial institutions in China with a range of software solutions for internet banking, mobile, credit cards, and data.

CLPS is growing top-line revenue and earnings in a high demand market environment.

When we learn details about management's pricing and valuation assumptions, I'll provide a final opinion.

Company And Technology

Shanghai, China-based CLPS was founded in 2005 to sell IT outsourcing services and custom software development primarily to financial firms seeking to improve efficiencies and add functionality to their service offerings.

Management is headed by CEO Raymond Lin, who has been with the firm since 2009 and previously held senior positions in IT and credit card processing solutions companies.

CEO Lin and Chairman Yan Xiaofeng each own 44.287% of company stock pre-IPO.

CLPS has created a suite of outsourced software competencies aimed at the financial services industry including development, testing, localization, BPO and training services.

Customer Acquisition

Management targets Chinese financial services firms presumably via direct sales and inside sales efforts, since it views the growth prospects within China will continue their strong trend upward in the future.

In addition, the firm says it has been 'working with a number of Chinese banks to assist them in leveraging blockchain technology. Using this technology, a loyalty reward solution was developed allowing domestic banks to track and trace transactions in real-time. It was recently implemented in Jiangnan Rural Commercial Bank. Also, the pilot phase of this solution was completed for Taicang Rural Commercial Bank.'

Selling and marketing costs vs. total revenue:

  • H2 2017: 5.0%
  • FYE 2017: 3.8%
  • FYE 2016: 1.4%

Although still low, CLPS's selling and marketing costs as a percentage of total

An enhanced version of this article including my commentary on the IPO is available on my Seeking Alpha Marketplace research service, IPO Edge. I write in-depth research about U.S. IPOs and members learn the latest IPO research, news, market trends and industry analysis. Start with a Free Trial.

This article was written by

Donovan Jones profile picture
Leader of IPO Edge
Get IPO Edge with actionable research on next-generation high growth stocks

I'm the founder of IPO Edge on Seeking Alpha, a research service for investors interested in IPOs on US markets. Subscribers receive access to my proprietary research, valuation, data, commentary, opinions, and chat on U.S. IPOs. Join now to get an insider's 'edge' on new issues coming to market, both before and after the IPO. Start with a 14-day Free Trial.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.