Kuaishou shares triple in Hong Kong trading debut
Kuaishou Technology (1024), China’s short-video service provider, saw its shares nearly tripled in its trading debut in Hong Kong on Friday, boosting the company’s market valuation to a high of US$180 billion (HK$ 13.95 trillion) following its initial public (IPO) offering, the largest in Hong Kong since 2019.
The stock hit a high of HK$345 in the morning before stabilising to close at HK$300, up 160.87% percent from its IPO price of HK$115 a piece. Kuaishou's share sale of US$5.29 billion (HK$41.3 billion) is the biggest in Hong Kong following Budweiser’s Asia unit’s IPO, which raised HK$5.75 billion in 2019.
Wesley Wong, a 29 year old investment banker, made a profit of HK$20,500 after selling one lot or 100 shares of Kuaishou at HK$320. He subscribed to the shares via a local brokerage and put up about HK$1 million.
The stock was in hot demand with retail investors bidding for 1,204 times the amount of shares available for open subscription.
Kuaishou makes its profit from providing live-streaming, online market and E-commerce and games services, and advertising, the company said in its listing document.
The successful listing of Kuaishou will bring confidence to other Chinese video service providers, including ByteDance and Bilibili, to float their shares in the Hong Kong stock exchange, said Bloomberg Intelligence senior analyst Vey-Sern Ling in a report.
Kuaishou’s larger rival Douyin, the Chinese version of TikTok owned by ByteDance, is planning to file an IPO in Hong Kong, according to Reuters. Douyin has 600 million daily active users while Kuaishou only has 262.4 million daily active users.
“The markets in which we operate are highly competitive, and we face significant competition,” Kuaishou said in its prospectus. It posted a revenue of HK$49 billion in the first nine months of 2020, up 49 percent from the same period in 2019.
However, the company was unprofitable from 2017-2019 and made a net loss of HK$16.6 billion in the first nine months of 2020, according to its prospectus.
Founded in 2011, Kuaishou was initially an animated graphics interchange format sharing app then evolved to a short video community in 2013 before adding live streaming in 2016. It has become the second most popular video sharing app in China.
The joint sponsors of its IPO were Morgan Stanley, Bank of America Corp. and China Renaissance.
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