Kuaishou to raise US$5.1bn in Hong Kong IPO

Tencent-backed short video app Kuaishou and the rival of TikTok, has priced its Hong Kong initial public offering (IPO) as it looks to raise funds to take on rivals such as Douyin, the Chinese version of TiKTok.

The company, founded by former Google and Baidu engineer Su Hua and former Hewlett Packard engineer Cheng Yixiao in 2012, says it is “dedicated to offering an authentic user experience through a massive and diverse library of short video and live streaming content, highly engaged and vibrant user communities and innovative and industry-leading technologies”.

Beijing-based Kuaishou could raise more than its stated goal of HK$39.5 billion is an over-allotment option is exercised. According to the South China Morning Post the flotation could value the company at up to US$61.7 billion, making it more valuable than NASDAQ-listed, Shanghai-based rival Bilibili and video streamer iQiyi.

It has claim to be the world’s second largest short-form video sharing platform, is planning to raise at least HK$39.5 billion (US$5.1 billion or €4.2 billion) through an IPO on the Hong Kong exchange. It would issue 365,218,600 shares each priced between $105.00 Hong Kong dollars to $115.00 Hong Kong dollars. The IPO is expected to be given a price this Friday ahead of share-trading commencing on February 5.

At the top end of the range, the company could raise around $42 billion Hong Kong dollars ($5.42 billion). The amount could be raised if the so-called over allotment option is exercised. The option allows the underwriting banks to issue a certain percentage more shares if demand is high.

Kuaishou is popular across China, particularly outside the major metropolitan centres. The service is available internationally. The company intends to use 35% of the proceeds to enhance and grow its ecosystem, with 30% allocated to strengthening its research and development and technological capabilities.

It is known as Snack Video in India, where it was banned in June last year over data and privacy concerns and amid growing political tension between the two Asian powers, and Kwai in other markets.

The USP of this Group  is it had approximately 1.1 billion average monthly short video uploads and nearly 1.4 billion live streaming sessions hosted on Kuaishou App, with 2.2 trillion likes, 173 billion comments and nine billion shares recorded on short videos and live streams over that period. Content creators form about a quarter of the 200 million-strong monthly user base.