Tiktok’s rival raised $ 5.3 billion from an IPO in Hong Kong

Shares of short video application development company Kuaishou (China) rose nearly 200% on the day of the Hong Kong stock exchange.

Kuaishou application interface on mobile phone. Photo: AFP

Kuaishou today 5/1 raised HK $ 41.28 billion (equivalent to 5.32 billion USD) from the initial public offering (IPO) in Hong Kong. CKuaishou polls this morning opened at 338 Hong Kong dollars, up more than 200% compared with issue price of 115 Hong Kong dollars, although this is already the highest level in the expected price range.

Kuaishou does business primarily from video apps and makes money from users who buy virtual gifts to give to his favorite streamers. Kuaishou is finding its way into new areas like e-commerce.

Kuaishou said the IPO this time has a very high number of investors registered to buy. If exercising the right to over-allocate, which is to sell additional shares that the company plans to issue during the IPO or secondary issuance, Kuaishou can raise more than $ 6 billion. There have been 10 key investors led by Capital Group, plus the participation of BlackRock and Fidelity, to invest in Kuaishou this time.

Kuaishou’s IPO is seen as a test of the market for Chinese tech companies as Beijing strengthens its oversight of the sector, from antitrust to data protection. According to CNBC, in November 2020, the Chinese government introduced rules regarding online shopping, which could affect tech companies like Kuaishou.

Kuaishou’s IPO has contributed to the performance of the Hong Kong Stock Exchange in recent years as the market has attracted many prominent technology companies to conduct IPO and secondary issuance. For example, many Chinese technology companies listed in the US, including: Alibaba and JD.com have raised more capital from the Hong Kong market. Most recently, China’s Bilibili Video Development Company – which is listed on the Nasdaq (US) – has applied to register for a secondary issue in the Hong Kong market.

In China, Kuaishou is facing stiff competition from rivals such as Douyin, the Chinese version of TikTok owned by the ByteDance Group, as well as the messaging app WeChat of Tencent Tech Corporation.

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