Shares closed at 300 Hong Kong dollars ($ 38.70) each, up 161% from the 115 Hong Kong dollars ($ 14.80) at which the company spent them. It raised a total of 41.28 billion Hong Kong dollars ($ 5.32 billion) in its offering.
If the company exercises an over-allotment option, the total amount raised could be as high as 47 billion Hong Kong dollars (nearly $ 6.1 billion).
According to data provider Eikon Refinitiv, it is the world’s largest tech listing since Uber’s IPO in May 2019 and the largest public offering globally since Saudi Aramco’s December 2019.
Kuaishou is one of the leading social media companies in China. The Tencent-backed company, whose name means “quick hand” in Chinese, owns an eponymous short video and live streaming app. Its platforms and mini-programs have more than 300 million active users every day.
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 scholarship filing. It also makes money from online advertising.
The company’s listing had been expected for months. An application this week said the offer was heavily oversubscribed.
“This is an incredible outcome,” said David Chao, co-founder and general partner of DCM, a Silicon Valley venture capital firm with $ 4 billion under management. His company was one of the first investors in Kuaishou, leading one of the first rounds of funding in 2014.
DCM still has a 9.2% stake in the social network, which is worth more than $ 14 billion on Friday at its current market value. The company said this would yield a return of about 600 times the original investment.
Focusing on the rise of live streaming and virtual goods early on, Chao said the company has leveraged “a new form of monetization that the US is just beginning to understand.”
Kuaishou is the latest company to impress by going public in Hong Kong, which over the past year has reinvented itself as a hotspot 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.
While the listing is a major win, Kuaishou still faces major challenges. It has long competed with industry leader ByteDance, which owns the Douyin app – the Chinese version of TikTok.
The listing also comes at a time when the tech industry is facing regulatory action in China. In his prospectus, Kuaishou alluded to that risk, referring to “the fact that the Internet business in China is highly regulated”.
– Laura He and Jill Disis contributed to this report.
