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NetEase unit Cloud Village pauses Hong Kong IPO as China’s antitrust scrutiny weighs on internet firms’ fundraising plans
- NetEase’s music-streaming unit Cloud Village was targeting up to US$1 billion proceeds from Hong Kong stock offering
- Beijing’s crackdown on the tech sector abetted a 60 per cent plunge in funds raised from Hong Kong IPOs in July from a year earlier
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Cloud Village, the music-streaming subsidiary of NetEase, has put its Hong Kong initial public offering on hold because of unfavourable market conditions, according to people familiar with the decision. The move comes amid challenging times for the tech sector that has been hit by anti-monopoly concerns.
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The operator of NetEase Cloud Music originally planned to raise as much as US$1 billion, after winning the Hong Kong stock exchange’s approval, the Post had previously reported. Cloud Village’s decision to shelve the initial public offering (IPO) comes after a quiet July, as fundraising in the city plunged 60 per cent year on year to US$2.8 billion from 17 deals, data from Refinitiv shows.
The crackdown by Beijing on its tech and education services sectors has weighed on the Hang Seng Index, which has lost 3 per cent year to date, after dropping to an eight-month low in late July. Some other companies such as Hello Inc, the bike-sharing firm backed by Ant Group, and e-commerce platform Meicai have also postponed their IPO plans amid regulatory scrutiny.
It was not immediately clear if Cloud Village, which is yet to post a profit, plans to resume the share sale at a later date, one of the sources said. Executives from Cloud Village were not immediately available for comment.
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The deal’s joint sponsors, Bank of America, CICC and Credit Suisse, either declined to comment or were not immediately available for comment.
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