The music arm of gaming and social network giant Tencent
Holdings Ltd <0700.HK> priced its American Depositary Receipts (ADRs)
at $13 per share, at the low end of its indicated $13 to $15 per
share range, it said in a filing with the Hong Kong stock
The IPO values Tencent Music at $21.3 billion and shows how
companies are defying a bout of market volatility with
Tencent Music sold 41 million ADRs, while existing shareholders
sold a further 40.9 million, the filing said.
Tencent Music's IPO tops off a bumper year for U.S. listings by
Chinese companies, with $7.9 billion raised before Tencent
Music's debut, Refinitiv data showed.
That is the highest amount since 2014, the year of Alibaba Group
Holding Ltd's <BABA.N> record $25 billion IPO.
Tencent Music's U.S. IPO is the fourth largest among Chinese
firms this year by deal value. Video streaming company iQiyi Inc
<IQ.O> leads with its $2.4 billion listing, followed by online
group discounter Pinduoduo Inc <PDD.O> at $1.6 billion and
electric vehicle maker NIO Inc <NIO.N> at $1.15 billion.
Returns for investors have been mixed, with the 31 Chinese IPOs
in 2018 down an average of around 11 percent as of Dec. 10,
according to data provider Dealogic.
With streaming apps QQ Music, KuGou, Kuwo as well as karaoke app
We Sing, Tencent Music is China's largest online music platform
boasting more than 800 million active users monthly.The firm is
often compared with Spotify Technology SA <SPOT.N> but offers
more socially interactive services that make it profitable while
its Swedish counterpart is not.
Tencent Music initially planned to launch the deal in October
but postponed because of a sell-off in global markets roiled by
a U.S.-China trade war and fears of slowing global growth.
Tencent Music reported a 244 percent profit jump for
January-September to $394 million. By comparison, Spotify lost a
net $520 million.
Morgan Stanley, Bank of America, Deutsche Bank, Goldman Sachs
and JPMorgan are the lead sponsors of Tencent Music's deal.
Tencent Music is due to begin trading on the New York Stock
Exchange on Wednesday under the symbol "TME" <TME.N>.
(Reporting by Joshua Franklin in New York and Julia Fioretti in
Hong Kong; Editing by Sandra Maler and Paul Tait)
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