Kuaishou Technology announces at a Beijing subway station on February 3.
Photographer: Yan Cong / Bloomberg
Photographer: Yan Cong / Bloomberg
Kuaishou Technology, the operator of China’s most popular short film service, after Douyin of ByteDance Ltd., jumped 194 percent in its Hong Kong debut after an initial $ 5.4 billion public offering that attracted hundreds of billions. order dollars.
The shares opened at US $ 338, compared to the IPO price of US $ 115, valuing the company supported by Tencent Holdings Ltd. at $ 179 billion. Company sold shares at the top of the price range in a transaction that ranks as the largest IPO in the world since the sale of Uber Technologies Inc. shares. in May 2019 of $ 8.1 billion.
Kuaishou Technology Headquarters in Beijing on February 3.
Photographer: Yan Cong / Bloomberg
This spectacular increase gives Kuaishou a price that rivals ByteDance – which last sought funding at $ 180 billion valuation – and introduces the nine-year-old video app to China’s largest technology corporations. Once known for the trafficking of strange images of Chinese rural life, Kuaishou is cementing its place among a generation of mega-start-ups similar to food delivery giant Meituan and leader Didi who grew up in the years after Alibaba Group Holding and Tencent Holdings .
If the gains are maintained, this would give Kuaishou the second best debut ever for an IPO of over $ 1 billion in the world, according to data compiled by Bloomberg. It joins an already long list of floats that appeared on their first day of trading in recent months, amid a bubble of liquidity and ultra-low interest rates.
Morgan Stanley, Bank of America Corp. and China Renaissance were joint sponsors of the agreement.
The stellar debut will be an encouraging sign for the larger rival ByteDance, which is said to be talks to list some of its Hong Kong assets. A long-time IPO candidate, the owner of TikTok was embroiled last year in the fight against the US ban on its popular application worldwide after being labeled a threat to national security.
“A successful listing of Kuaishou will pave the way for his bigger rival,” said Bloomberg Intelligence chief analyst Vey-Sern Ling. “Douyin will be more motivated to enter the market, and investors can get a better perspective on China’s short video industry, with Kuaishou’s regular revelations in the future.”
Big gains
SMIC in China, Alibaba.com recorded the highest gains from day one
Source: Bloomberg
Kuaishou’s exit party broke records in Hong Kong for the number of retail investors who subscribed to its shares and the amount pledged in the process. About 1.4 million mom and pop investors – one in five people in the city – have placed $ 1.26 trillion ($ 163 billion) in orders, while institutional buyers have amassed nearly $ 200 billion.
The request matched the frenzy for the mong IPO Ant Group Co. from Hong Kong, which attracted $ 1.3 trillion in bids for its retail tranche before the planned $ 17.2 billion bid collapsed.
“Growth technology companies are still in high demand,” said Gary Dugan, executive director at the CIO Global Bureau in Singapore. “As the world continues to struggle with the Covid crisis, investors remain focused and invest more in technology stocks that have a strong growth story. Therefore, we expect demand for these types of IPOs to remain strong, and early trading premiums likely to tend to be extraordinary. ”
Billionaires
Founded by former Google employee Su Hua and Cheng Yixiao, as an app built around sharing animated GIF images, Kuaishou briefly pivoted video in 2013 and added live streaming in 2016, reaching the two strongest social media formats from the world .
At the opening price of US $ 338, Su’s net worth has risen to over $ 21.1 billion, and Cheng is worth $ 14.7 billion. The wealth of two other directors of the company has also increased to over 3 billion dollars.
Kuaishou Technology application.
Photographer: Roy Liu / Bloomberg
The company had an average of 264 million daily active users on its main Kuaishou app as of November 2020, according to its prospectus, less than half of the 600 million on Douyin. However, it grew rapidly.
Revenue rose 49 percent to 40.7 billion yuan ($ 6.3 billion) in the first nine months of last year after the company stepped up its efforts to monetize advertising and e-commerce. While Kuaishou offers free access to its main platform, the startup takes some of the advice that users offer to their favorite live streams that go viral, synchronize their lips with the latest pop songs and play video games.
– With the assistance of Zheping Huang, Edwin Chan, Venus Feng and Ishika Mookerjee
(Updates throughout)