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HONG KONG (Reuters) – Tencent Music Entertainment, owner of the most popular music apps in China, has filed a public call for savings to raise money for content and new services, which should be One of the most important American ads a year.
FILE PHOTO: A Tencent poster was seen at the Fourth World Internet Conference in Wuzhen, Zhejiang Province, China, December 4, 2017. REUTERS / Aly Song / File Photo
The music branch of tech giant Tencent Holdings (0700.HK), which provides for Nasdaq listing, has set a reserved amount of $ 1 billion (£ 769.5 million) for registration. According to sources, last month he was hoping to raise $ 2 billion.
With QQ Music, Kugou, Kuwo streaming applications and the WeSing karaoke app, Tencent Music is China's largest online music platform, with more than 800 million active users per month.
It is often compared to Spotify Technology SA (SPOT.N), but the Chinese company offers more social interactive services, which makes it profitable while its Swedish counterpart is not.
Music-centric social entertainment services, which include virtual gifts and premium subscriptions, accounted for just over 70% of the $ 1.65 billion in revenue generated in 2017, according to the document filed with the Securities and Exchange. Commission of the United States.
Profit after tax is $ 199 million. The repository also showed that only 3.6% of Tencent Music users pay for music.
For the first six months of this year, revenues jumped 92% to $ 1.3 billion, while after-tax profits quadrupled to $ 263 million.
In comparison, Spotify, with which it has entered into a cross-shareholding agreement, lost 90 million euros in the second quarter of this year for a turnover of 1.3 billion euros.
The number of Tencent Music shares for sale was not revealed and potential ratings were not clear. Spotify is now valued at $ 31 billion, with shares gaining about 8% since its US debut in April.
Chinese companies have raised $ 7.5 billion in US markets so far this year, the largest amount since 2014, according to Refinitiv data.
These include the video streaming company iQiyi (IQ.O), which generated $ 2.4 billion, the commissioning of an electric vehicle, Nio Inc. (NIO.N) which raised $ 1 billion and the online discounter group Pinduoduo (PDD.O) which raised $ 1.63 billion.
Tencent Music's IPO comes as the global music industry gets back on track with more listeners listening to music streaming via smartphone apps, compared to a few years ago when market was dominated by pirated music.
Its apps contain more than 20 million pieces of international and national music brands, the newspaper said, while millions of users daily consult the WeSing karaoke application.
WeSing allows people to organize karaoke nights in virtual theaters, challenge themselves and sing in duet with celebrities or other users.
Bank of America, Deutsche Bank, Goldman Sachs, JPMorgan and Morgan Stanley are the main sponsors of the transaction.
Julia Fioretti's report in Hong Kong; Other reports by Aparajita Saxena and Diptendu Lahiri in Bengaluru; Edited by Edwina Gibbs
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