Kuaishou, a technology company based in Beijing, is trying to raise as much as$ 6.2 billion in a stock marketentry in Hong Kong,according to details of the planned IPO shared with CNN Business by a source familiar with the deal.
The company, whose name means “quick hand” in Chinese, plans to issue approximately 365 million shares with a price of between 105 and 115 Hong Kong dollars ($ 13.55 and $ 14.84). At the top of that range, it would bring in Hong Kong dollars 42 billion or $ 5.4 billion. Issuing more shares in an over-allotment option could bring profits to $ 6.2 billion.
That puts Kuaishou on track to become the largest IPO since Saudi Aramco shattered records with an increase of nearly $ 30 billion in December 2019, according to data provider Refinitiv. It would also be the largest tech IPO in the world ever since Uber(UBER) Raised more than $ 8 billion in May 2019, according to Refinitiv data.
Kuaishou is an app that allows users to film short videos and stream content live. It derives most of its revenue from the live streaming business, where users can purchase virtual items and present them as gifts to their favorite hosts. Live stream transactions accounted for 84% of sales in 2019, according to a prospectus filed with the Hong Kong Stock Exchange. It also makes money from online advertising.
The company expects to price its shares by the end of this week and to list them on February 5.
Kuaishou did not immediately respond to a request for additional comment from CNN Business.
The company, which is backed by Chinese social media and gaming giant Tencent(TCEHY), was founded 10 years ago and is one of the largest short-form video apps in China. It had an average of 264 million daily active users during the 11 months to November,according to the prospectus.
Yet that is far from market leader ByteDance. The company’s Douyin app – the Chinese version of TikTok – had more than 600 million daily users in August, the company said.
The listing also comes at a time when Chinese tech companies in China are facing intense regulatory oversight. Alibaba, Tencent and other major internet companies operating popular apps and services have been warned in recent weeks about creating monopolies and misusing consumer data for profit.
And Jack Ma’s Ant Group, Alibaba’s financial affiliate, saw its own mega-IPO sunk by regulators late last year, just days before it was scheduled to trade in Shanghai and Hong Kong. It would have been the largest stock sale in history.
In his prospectus, Kuaishou cited “the fact that Internet activities in China are highly regulated” as a potential risk.
Ten cornerstone investors have already committed to invest $ 2.45 billion in Kuaishou. They include Temasek, BlackRock, GIC, the Abu Dhabi Investment Authority, Fidelity and Invesco. The deal’s sponsors include Bank of America Securities, Morgan Stanley and China Renaissance.
The IPO would also be a major problem for Hong Kong, which has reinvented itself over the past year as a hot market for Chinese technology companies.
Since 2019 Alibaba,(BABA)Netease (DETECTOR)and JD.com(JD) all have secondary listings in the Asian Financial Center. The city also made changes last year to attract even more businesses. For example, index compiler Hang Seng Indexes has launched a Nasdaq-like technology index to track the largest technology companies trading in the city.
