Tencent-backed video-sharing app Kuaishou wins green light from Hong Kong to raise up to US$6 billion

With a user base of 300 million daily live-streaming users, Beijing-based Kuaishou is the world’s second-largest video-sharing app

IPO could set the stage for listings by competitors Bilibili, Douyin and iQiyi

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Kuaishou’s stand at the Shanghai New International Expo Center on July 30 in Shanghai, China. Photo: Getty Images

Published: 10:22am, 15 Jan 2021Updated: 10:38am, 15 Jan 2021

Beijing-based Kuaishou Technology, the world’s second-largest video-sharing app, has won the green light from Hong Kong to raise roughly US$5 billion to US$6 billion, potentially the city’s largest IPO in over a year, a person familiar with the matter said on Friday.

The company, in which Tencent Holdings, China’s largest games publisher, owns a 21.6 per cent stake, was cleared by the listing committee of the Hong Kong stock exchange on Thursday night. The nine-year-old company can now launch its premarketing road show before final pricing on January 28 or 29. Its shares are expected to start trading before the Lunar New Year holiday, which starts on February 12, several people familiar with the matter have said.

Kuaishou, which means speedy hands in Chinese, is one of two dominant players in China’s video-sharing market, which had 818 million short video users at the end of June 2020, according to the China Netcasting Services Association. It was valued at more than US$30 billion in its last funding round.

Last year, it reported a first-half loss of 68 billion yuan (US$10.53 billion), or 373 million yuan in losses a day. It has a user base of 300 million daily live-streaming users, which makes it the world’s second-largest short video platform. ByteDance, the parent company of Tiktok, said Douyin, the Chinese version of the app, had 600 million daily users on average as of August last year, which makes it the largest such platform.

Kuaishou opens a karaoke store in Guangzhou where customers can either sing on a public stage or entertain themselves in a soundproof cubicle equipped with a screen, microphones and earphones. Photo: Handout

Its initial public offering (IPO) will surpass the US$3.9 billion raised by JD.com’s secondary listing last June, and will be second only to the US$13 billion secondary listing in November 2019 by Alibaba Group Holding, which owns the South China Morning Post.

The IPO’s size also presents investors with a challenge, as they must weigh the cost of acquiring new users against Kuaishou’s path to profitability. Some analysts have also raised concerns about how it could turn its broad user base into profits.

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