Kuaisou Targets $5.4 Billion in Hong Kong IPO
Kuaishou Raises $ 5.3 Billion During Its Hong Kong IPO
DCM yesterday raised $ 16 billion in revenue from the IPO of Chinese social media app Kuaishou. The listing was in Hong Kong, not the US, and DCM co-founder David Chao expects China’s most famous tech startups to follow suit..
Chao said that the main reason for the placement in China was «four years of political oppression by the administration Donald Trump».
«Our relationship has escalated. Former US President’s attacks on Huawei and promises to bar some Chinese firms from the market have forced businesses to rethink the issue of going public in the US.», – said David Chao.
Previously, American exchanges were very competitive in attracting leading Chinese companies.. The country’s two largest online retailers – Alibaba and JD.com, went public on the Nasdaq in 2014. An internet company joined them a few years ago Baidu, a gaming platform NetEase and the travel website Ctrip (now Trip.com).
But this trend is starting to fade as China’s largest tech projects increasingly choose to stay at home.. Hong Kong is the fourth largest exchange globally in terms of total market capitalization of listed companies, second only to the New York Stock Exchange, Nasdaq and Shanghai Stock Exchange.
In January, the NYSE responded to executive order Trump, signed in November, barring Americans from investing in some Chinese companies that authorities suspect have links to Beijing’s military. The list included China Telecom, China Mobile and China Unicom.
Regardless of the approach of the administration Joe Biden, Chao expects Hong Kong to remain attractive for investment as «companies see their Hong Kong listing is in no way inferior to trading on the US exchanges».
The placement of Kuaishou, which operates similarly to the video app TikTok, is second only to the IPO of a trading site. Meituan and manufacturer smartphones Xiaomi In 2018, Tencent Music is also preparing a $ 5 billion public offering in Hong Kong.
Kuaishou raised HK $ 41.28 billion ($ 5.32 billion) in its IPO. Its shares jumped almost 200% and continue to rise. They are currently valued at HK $ 398 apiece, raising the company’s market cap to $ 210 billion..
TikTok has also found itself in conflict with the Trump administration, which threatened close the app last year. The ban in the United States has never been implemented, but Biden has not yet closed this question.
Chao noted that one of the important factors influencing the choice of the Hong Kong exchange was that the Chinese Internet giant also chose the same platform. Tencent.