Q&K International Group Limited

QK

We are a leading technology-driven long-term apartment rental platform in China, offering young, emerging urban residents conveniently-located, ready-to-move-in, and affordable branded apartments as well as facilitating a variety of value-added services. We are one of the pioneers in providing branded rental apartments in China. Under our dispersed lease-and-operate model, we lease apartments from landlords and transform these apartments, mostly from bare-bones condition, into standardized furnished rooms to lease to people seeking affordable residence in cities, following an efficient, technology-driven business process. We grew significantly at 114.4% CAGR from 940 available rental units in Shanghai as of December 31, 2012, the year when we started substantial operation, to 91,234 available rental units across six cities in China as of December 31, 2018. We ranked first among branded long-term apartment operators in the Yangtze mega-city cluster centered around Shanghai, one of the most prosperous regions in China, in terms of gross rental value in 2018 and the number of available rental units as of December 31, 2018, and third among branded long-term apartment operators in China, in terms of the same metrics, according to China Insights Consultancy.

According to China Insights Consultancy, approximately 80% of tenants in China sought for apartments with monthly rental less than RMB2,000 (US$291) as of December 31, 2018. We are the largest branded long-term apartment rental operator with average monthly rental less than RMB2,000 (US$291) in China, in terms of number of available rental units as of December 31, 2018, according to the same source. We achieved average month-end occupancy rates of 91.6% and 92.4% in 2017 and 2018, respectively, the highest among major branded long-term apartment rental platforms in China, according to the same source.

Driven by the rapid urbanization, rising housing prices, millennial mindsets of sharing economy, and supportive government policies, branded long-term rental apartment service is an underpenetrated, fast-growing industry in China. An increasing number of young people in China move to cities for education or work and seek affordable long-term rental apartments. Traditionally, tenants rely on rental agencies or deal with individual landlords to rent apartments and have to contact individual landlords, who at times may not be responsive, for maintenance and repair during the lease. In the meantime, landlords need to handle apartment maintenance and repair and collect rentals all by themselves.

In recent years, branded apartment operators have emerged to provide a one-stop, more efficient and hassle-free rental experience for tenants as well as landlords. In addition, central and local governments in China have adopted policies to incentivize and support the growth of the apartment rental sector, including reducing rental income tax and value-added tax for apartment rental operators, and offering equal access to public services and schools to both renters and homeowners, reducing income tax, and medical insurance and social security payment ratio for individuals with monthly income below RMB10,000.0 (US$1,456.7)—our target customer group. Compared to developed countries such as the United States, where the branded long-term apartment rental penetration rate was 46.0% in 2018, China’s branded long-term apartment rental penetration rate was only 1.8% in 2018 and is expected to reach 11.2% by 2024, according to China Insights Consultancy. 

Offer Price Offer Size 3-Year Outlook Volatility 1st Day Turnover
$17.00 2,700,000 Positive High 13.86%

Offering Team

Deal Managers

  • Morgan Stanley

Lawyers

  • Cleary Gottlieb Steen & Hamilton LLP

Auditors

  • Deloitte Touche Tohmatsu Certificated Public Accountants LLP

Pre-IPO Investors

Investors

  • Google Ventures
  • Intel Ventures
  • Patricoff Ventures
  • Kleiner Perkins

Pre-IPO Holdings(%)

  • 30
  • 20
  • 05
  • 18

Deal Highlights

Deal Tracker

Investors

Filing

31 Oct, 2019

Offer

05 Nov, 2019

Look Ahead

Lock Up Expiry

05 May, 2020

Earning

Nov 1, 2018

IPO Terms

Offer Price $17.00
Offer Size 2M

Market Sentiments

Stock Price