ByteDance Rival Kuaishou Preps a $5 Billion IPO In Hong Kong

Tencent Warner Music
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Tencent Warner Music
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Photo Credit: Tencent

Tencent-backed ByteDance rival Kuaishou is preparing a more than $5 billion IPO in Hong Kong.

Multiple sources have reported on the quick-approaching Kuaishou IPO, which the Beijing-headquartered video-sharing and livestreaming platform formally filed for back in November of 2020. Founded in 2011 by former Google engineer Su Hua, Kuaishou boasted over 300 million daily active users (DAUs) as of last June, according to company higher-ups.

The DAU growth figure marks a roughly 42 percent year-over-year increase for the platform, despite continued market gains for the domestic leader Douyin (known as TikTok internationally). To be sure, ByteDance-owned Douyin/TikTok generated $115 million solely from in-app purchases in October of 2020, per Sensor Tower, and a noteworthy 86 percent of the revenue (almost $99 million) derived from China-based Douyin users.

Kuaishou, 21.5 percent of which belongs to Tencent, is reportedly planning to price its shares between $13.54 (HK$105) and $14.84 (HK$115) apiece, to raise about $5.4 billion at an overarching company valuation of some $60 billion.

Prospective investors in the early-February IPO include the United Arab Emirates’ Abu Dhabi Investment Authority, according to Bloomberg. In a testament to the live music space’s ongoing growth in the Middle East, Saudi Arabia bought a $500 million stake in Live Nation via its Public Investment Fund last April.

Tencent stock experienced a 6.25 percent uptick from Friday’s close today, with shares worth an even $96 each. This per-share price briefly cracked an all-time-high of $98.19 when the market opened this morning, though what appeared to be a small selloff then brought it back into the mid-$90s range.

And Tencent Music, which is preparing a second, $3.5 billion Hong Kong IPO of its own, has quietly seen its stateside stock (symbol TME) climb from about $19.37 per share to over $27 per share in the new year. Earlier this month, the company dropped over $415 million to acquire podcast, audiobook, and radio platform Lazy Audio.

It bears mentioning that a rule change last year made it easier for some China-based companies with shares listed on foreign exchanges to also roll out Hong Kong IPOs. Though Kuaishou doesn’t have a stateside listing, news of Tencent Music’s aforementioned Hong Kong IPO followed NetEase’s arriving on the Hong Kong Stock Exchange during the summer of 2020. In the U.S., the company is traded on the NASDAQ as NTES.

Given that Tencent operates China’s leading music-streaming services (QQ Music, Kugou Music, Kuwo Music, and the WeSing karaoke app) and music continues to play a prominent part on short-form video-sharing platforms, it’ll be worth looking out for Tencent Music-Kuaishou collaborations moving forward. Moreover, Tencent Music has continued to tout the success of its livestream gigs, and unlike the advertising-driven TikTok, almost 70 percent of Kuaishou income is attributable to livestreams.

Liberty Media, which owns about one-third of Live Nation and approximately 70 percent of SiriusXM, debuted a $500 million IPO last week for a “special purpose acquisition company.” Additionally, billion-dollar IPOs are on the way for both Roblox and (reportedly) Believe Digital.