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Kuaishou, a Beijing-based tech company, seeks to raise as much as $ 6.2 billion on the stock market registration in Hong Kong, according to details of the planned IPO shared with CNN Business by a source familiar with the transaction.
The company, whose name means “quick hand” in Chinese, plans to issue around 365 million shares priced between 105 and 115 Hong Kong dollars (13.55 and 14.84 dollars). At the top of that range, that would raise HK $ 42 billion, or $ 5.4 billion. Issuing more shares in an over-allotment option could raise its transport to $ 6.2 billion.
This puts Kuaishou on track to become the largest IPO since Saudi Aramco broke records with an increase of nearly $ 30 billion in December 2019, according to data provider Refinitiv. It would also be the world’s largest tech IPO. Uber (UBER) raised more than $ 8 billion in May 2019, according to data from Refinitiv.
Kuaishou is an application where users can shoot short videos and live content. It derives most of its revenue from the live streaming business, where users can purchase virtual items and give them as gifts to their favorite hosts. Live transactions accounted for 84% of revenue in 2019, according to a prospectus filed on the Hong Kong Stock Exchange. He also makes money from online advertising.
The company plans to price its shares by the end of this week and list them on February 5.
Kuaishou did not immediately respond to a request for further 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 applications in China. It had an average of 264 million daily active users for the 11 months through November, according to its prospectus.
Even so, it is far from the industry leader ByteDance. The company’s Douyin app – the Chinese version of TikTok – had more than 600 million daily users in August, according to the company.
The listing also comes at a time when Chinese tech companies are facing rigorous regulatory scrutiny in China. Alibaba, Tencent and other large internet companies that operate popular apps and services have been warned in recent weeks of the creation of monopolies and the misuse of consumer data for profit.
And Jack Ma’s Ant Group, Alibaba’s financial arm, saw its own mega IPO scuttled by regulators late last year, just days before it went public in Shanghai and Hong Kong. It would have been the biggest stock sale in history.
In its prospectus, Kuaishou mentioned “the fact that Internet activity is highly regulated in China” as a potential risk.
Ten key investors have already pledged to invest $ 2.45 billion in Kuaishou. They include Temasek, BlackRock, GIC, the Abu Dhabi Investment Authority, Fidelity and Invesco. Sponsors of the deal include Bank of America Securities, Morgan Stanley and China Renaissance.
The IPO would also be a big deal for Hong Kong, which has spent the last year reinventing itself as a hot market for Chinese tech companies.
Since 2019, Ali Baba, (BABA) NetEase (DETECTOR)and JD.com (JD) all held secondary listings in the Asian financial center. The city also made changes last year to attract even more businesses. The Hang Seng Indexes index compiler, for example, launched a Nasdaq-like technology index to track the biggest tech companies that trade in the city.
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