Kuaishou Technology, a popular short video-sharing app in China, has started taking orders for its upcoming initial public offering in Hong Kong, which is expected to raise up to HK$41.98 billion (US$5.38 billion). The shares are scheduled to be listed on February 5.
The Tencent-backed company plans to sell 365 million shares at a price range of HK$105 to HK$115, and has already secured 10 cornerstone investors including Capital Group, Temasek and BlackRock, which have allocated US$500 million, US$330 million and US$225 million respectively for the deal. All cornerstone investors have agreed to hold the stock for six months.
Second only to Douyin (the mainland Chinese version of TikTok, owned by ByteDance), Kuaishou has around 262 million users spending an average of 86 minutes every day on the app. It tries to distinguish itself from Douyin by targeting video streamers in China’s tier-2 or tier-3 cities.
Kuaishou is estimated to have a valuation of US$70 billion to US$97 billion, according to Morgan Stanley research.
Morgan Stanley, BofA Securities and China Renaissance are joint sponsors, global coordinators, bookrunners and lead managers for the deal.
Other joint bookrunners and lead managers include HSBC, ICBC International, Haitong International, CMBI, BOCI and Futu Securities.
Unlike ByteDance, Kuaishou has largely avoided being caught in geopolitical tensions between the United States and China. Earlier this year former US President Donald Trump banned transactions with eight Chinese apps, including Alipay and WeChat Pay, over national security concerns.
The Kuaishou deal is another boost for the Hong Kong Exchanges and Clearing, which has been seeking to attract technology companies to list in the city. The exchange was the venue of several high-profile Chinese tech listings over the past year, including online retailer JD.Com, internet company NetEase, and e-commerce platform Meituan.
Total funds raised by IPOs on the HKEX in 2020 reached HK$397.7 billion (US$51.31 billion), a 25% increase from the previous year, according to data from PwC. The Hong Kong market is predicted to raise between HK$420 billion and HK$460 billion (US$54.18 billion-US$59.34 billion) in 2021 through IPOs.