TikTok rival Kuaishou Launches IPO in Hong Kong

  • January 25, 2021 07:33 AM GMT
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TikTok rival Kuaishou Launches IPO in Hong Kong

Summary

  • Kuaishou Technology, which specialises in video editing and live-streaming software, is seeking a stock market floatation worth $5.4 billion through an IPO.
  • The tech company is eyeing a market capitalisation of around $60.9 billion.
  • Big Institutional investors, including Capital Group, BlackRock Inc., Boyu Capital, and others have agreed to buy a combined stock worth $2.45 billion.

The year 2021 will have IPO raining across the global markets. The fresh offerings were held back by companies in 2020 due to pandemic and uncertainties in the markets. Chinese online video company Kuaishou Technology, which is backed by technology company Tencent Holdings Limited, is expected to raise funds by issuing fresh equity in the special administrative region of PRC (People's Republic of China), Hong Kong.

The year 2021 is expected to be a good year for stock market flotations. Several technology companies that have witnessed a huge surge in online demand during the pandemic-induced lockdowns are eyeing public listings as IPO’s tend to become a global phenomenon.  

Kuaishou Technology, which specialises in video editing and live-streaming software, is seeking a stock market floatation worth $5.4 billion through an initial public offering in the Stock Exchange of Hong Kong (SEHK). Notably, several technology companies from China have listed in Hong Kong. Kuaishou Technology, which is the ByteDance Ltd’s rival, anticipates a minimum deal size of $4.95 billion, and would be the world’s biggest IPO in the technology space since Uber Technologies in 2019.

(Image source: ©Kalkine Group 2020)

According to some media reports, Kuaishou Technology is expected to issue fresh equity to the tune of 365.2 million shares (offer size), which could be priced between HK$105 and HK$115 each.  This implies that the tech company is eyeing a market capitalisation of around $60.9 billion. The potential IPO is expected to provide major boost to the Hong Kong Stock Exchange. The Chinese technology start-up is expected to go public on 5 February.

According to leading data provider PitchBook, Tencent-led consortium including Singapore's Temasek along with other venture-capital and private-equity firms had invested $3 billion in the TikTok rival. The Chinese online video company has successfully raised $4 billion through multiple funding rounds. This has led to a sharp rise in the tech company’s valuation, which stood at $28.6 billion in February 2020.

Big Institutional investors, including Capital Group, BlackRock Inc., Boyu Capital, and others have agreed to buy a combined stock worth $2.45 billion. The deal is jointly sponsored by China Renaissance Holdings Ltd., Morgan Stanley, and Bank of America Corp.

Also read: LSE (LON: LSE) planning to revamp its IPO process

UK’s IPO market

The year 2021 already witnessed outlined plans for IPO’s from shoemaker Dr Martens, online greetings card seller Moonpig and app-based food delivery service Deliveroo. The investor’s confidence shall continue to build as we go deeper in 2021. Britain has finally separated from the EU, and this event will certainly bring clarity to the businesses. Several companies might look to raise funds by issuing equity in the London stock market as Brexit becomes the major driving force behind. Also, with Covid-19 vaccination programmes in full swing, the markets are expected to make a steady recovery. 

Also read: Moonpig To Launch Public Issue in London Worth £1 Billion

 

 


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