Chinese short video app operator Kuaishou Technology will raise $ 5.4 billion from its listing in Hong Kong, hitting the highest fundraising target after meeting strong demand from investors.
The world’s first public offering is expected to be the largest in more than a year, and will add nearly $ 61 billion worth of the company. Kuaishou, backed by Tencent Holdings Limited.
TCEHY -0.56%
, competes with ByteDance Ltd., the Chinese company behind TikTok and its sister app Douyin.
Both companies have fueled a growing demand from Chinese young people to watch and record short videos on their smartphones. Kuaishou name short video platform is the second largest in the world, according to data cited in its preview, and its services had an average of 305 million daily active users in China in the nine months that ended in September.
Kuaishou, or “quick hand” in Chinese, sells stock at 115 Hong Kong dollars (US $ 14.80) a share, an earlier range top from HK $ 105 to HK $ 115, according to a term page seen Saturday by The Wall Street Journal. Its shares will start trading on February 5th.
The IPO will help consolidate Hong Kong’s position as a marketplace for major Chinese technology organizations. The city has in recent years received IPOs from companies such as Meituan, a major player in the delivery of food and travel tickets, and smartphone maker Xiaomi Corp.
, as well as high school listings from US-listed businesses such as Alibaba Group Holding Limited.
and JD.com Inc.
Shares in these companies have grown, with Meituan stock more than tripling in the last 12 months, and Xiaomi doubling more than the same period. A benchmark targeting technology introduced last summer by Hang Seng Indexes Co., which compiles the city’s Hang Seng Index, is at 32% in the six months through Friday’s close.
Kuaishou is also benefiting from wider IPO market diversification, both in Hong Kong and internationally. After entering hot markets in Hong Kong last year, Chinese vaping technology company Smoore International Holdings launched Limited.
, and the bottled water giant Nongfu Spring Co.
for example, both are worth multiples of their valuations at their IPOs.
Morgan Stanley Unit,
Bank of America Corp.
and China Renaissance Holdings Limited.
working as co-sponsors for Kuaishou IPO. A block of 10 cornerstone investors backed the deal by promising to buy $ 2.45 billion of shares wherever in the range it cost.
A so-called green shoe option means that subscribers could eventually increase the size of the deal by 15%, to a total of $ 6.2 billion.
Write to Joanne Chiu at [email protected] and Quentin Webb at [email protected]
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