Kuaishou technology ads at a subway station in Beijing on February 3.
Photographer: Yan Cong / Bloomberg
Photographer: Yan Cong / Bloomberg
Kuaishou Technology, operator of China’s most popular short video service after Douyin of ByteDance Ltd., jumped 194% on its Hong Kong debut after a $ 5.4 billion IPO that attracted hundreds of billions of people. dollars in orders.
The shares opened at HK $ 338, compared to the IPO price of HK $ 115, valuing the company supported by Tencent Holdings Ltd. at $ 179 billion. The company sold shares at the top of its price range in a deal it ranks as the largest Internet IPO in the world since the $ 8.1 billion sale of Uber Technologies Inc. shares in May 2019.
Kuaishou Technology’s headquarters in Beijing on February 3.
Photographer: Yan Cong / Bloomberg
This spectacular increase gives Kuaishou a price that rivals ByteDance – which sought funds in a $ 180 billion valuation – and introduces the nine-year-old video app to the ranking of China’s largest technology corporations. Once known for selling quirky representations of Chinese rural life, Kuaishou cements its place among a generation of mega-startups like food delivery giant Meituan and leader Didi, who grew up in the years after Alibaba Group Holding and Tencent Holdings.
If the gains continue, it would give Kuaishou the second best debut ever, with an IPO of more than $ 1 billion worldwide, show data compiled by Bloomberg. He joins an already long list of floats that burst on his first trading day in recent months amid excess liquidity and ultra-low interest rates.
Morgan Stanley, Bank of America Corp. and China Renaissance were the joint sponsors of the business. Kuaishou shares rose 166% to HK $ 306 at 1:22 pm in Hong Kong. The stock could be added to the Hang Seng China Enterprises Index later this month if its market value was among those in the indicator 10 highest at Friday’s close.
The stellar debut will be an encouraging sign for the biggest rival ByteDance, which is said to be in discussions to list some of its Hong Kong assets. A longtime supposed IPO candidate, the owner of TikTok was bogged down last year in the fight against the U.S. ban on its worldwide popular app after being labeled a threat to national security.
“A successful Kuaishou listing will pave the way for its biggest rival,” said senior Bloomberg Intelligence analyst Vey-Sern Ling. “Douyin will be more motivated to come to the market and investors can get a better view of China’s short video industry with regular Kuaishou disclosures going forward.”
Big gains
China’s SMIC, Alibaba.com recorded the biggest gains ever on the first day
Source: Bloomberg
Breaking records
Kuaishou debutante party broke records in Hong Kong for the number of retail investors subscribing to its shares and the amount promised in the process. About 1.4 million small investors – one in five people in the city – have sent HK $ 1.26 trillion ($ 163 billion) in orders, while institutional buyers have accumulated nearly $ 200 billion.
The demand matched the frenzy for the Hong Kong leg of Ant Group Co.’s mega IPO, which attracted HK $ 1.3 trillion in proposals for its retail tranche, before the planned $ 17.2 billion offer failed.
“Growth technology companies are still in high demand,” said Gary Dugan, CEO of the Global CIO Office in Singapore. “With the world still struggling with the Covid crisis, investors remain focused and investing more in technology stocks with a history of strong growth. Therefore, we expect demand for these types of IPOs to remain strong, and stock price premiums at the start of trading are likely to be extraordinary. ”
Billionaires
Founded by former Google employee Su Hua and Cheng Yixiao as an app created around sharing animated GIF images, Kuaishou revolved around short videos in 2013 and added live streaming in 2016, landing in what eventually became two of most popular social media formats in the world.
At the opening price of HK $ 338, Su’s net worth jumped to more than $ 21.1 billion and Cheng is worth $ 14.7 billion. The fortunes of two other company executives have also increased to more than $ 3 billion.
The Kuaishou Technology application.
Photographer: Roy Liu / Bloomberg
The company had an average of 264 million daily active users on its flagship Kuaishou app in November 2020, according to its prospectus, less than half of the 600 million in Douyin. Even so, it is growing fast.
Revenue grew 49% to 40.7 billion yuan ($ 6.3 billion) in the first nine months of last year, after the company stepped up monetization efforts through advertising and e-commerce. Although Kuaishou offers free access to its main platform, the startup takes a portion of the tips that users give to their favorite live-streamers who perform viral challenges, synchronize their lips with the latest pop songs and play video games.
– With the help of Zheping Huang, Edwin Chan, Venus Feng, Ishika Mookerjee and Kevin Kingsbury
(Share updates move in the fifth paragraph)