TikTok owner ByteDance likely to launch Hong Kong IPO in second quarter
ByteDance has started preparations for its Hong Kong IPO and is likely to file a prospectus in the second quarter assuming the company’s valuation of up to $400 billion (HK$3.12 trillion), about 1.8 times of its competitor Kuaishou, according to media reports.
Caixin Global said if the Hong Kong IPO could be successfully launched, ByteDance would be the third most valuable listed company at the Hong Kong stock exchange behind Tencent and Alibaba group. Caixin put the valuation of ByteDance at about US$300 billion (HK$ 2.33 trillion) while Hong Kong and international media reported that it would be up to $400 billion (HK$3.12 trillion). However, ByteDance kept silent on the rumoured listing plan.
The listing of the Beijing-based start-up is expected to include BtyeDance’s most popular mobile applications such as Douyin, news platform Toutiao and video service Xigua. TikTok will probably seek a separate listing since it involves overseas assets, Caixin said.
China Securities Journal said that ByteDance had notified the operator of the HKEX that it had appointed securities underwriters on Wednesday but the media took away the story from its website on the same day. According to the HKEX underwriting agreements, firms are required to appoint sponsors and underwriters at least two months ahead of applying for IPO.
The latest stock-option price for employees trading their bonuses to ByteDance’s unlisted stocks more than doubled compared with last year to $126 (HK$978.82) per share from under $50 (HK$388.42). The price did not move much from 2019 to 2020 at around $44 (HK$341.81).
The prominent rise in internal stock-option price reflects the private equity market’s assessment of the firm’s value in the past 12 months. ByteDance now is the world’s highest-valued unicorn.
ByteDance’s rival Kuaishou, with 271 million daily active users, reported revenue of 58.8 billion yuan (HK$ 69.93 billion) and losses of 116.6 billion yuan (HK$ 138.67 billion) in 2020, has provided a benchmark for ByteDance’s valuation.
ByteDance’s valuation has been surging after this year’s Hong Kong listing of Kuaishou. As ByteDance has about 600 million daily active users on its popular video app Douyin alone, investors expect it should be priced higher.
The company has not declared any IPO plan to the public. However, it hired Shou Zi Chew, the former international business head of smartphone maker Xiaomi, as its chief financial officer last month, which may be seen as a sign of an upcoming IPO according to Bloomberg.
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