Tencent Music said to be planning for US IPO in December

Tencent Music will be taking investor orders early next month, and looks to start trading by mid-December.

Tencent headquarters
Source: AP

Tencent Holdings’ subsidiary Tencent Music looks to start trading on December 12, and will plan to run a roadshow after the G20 summit which will take place in Bueno Aires on November 30 and December 1.

According to sources which told media reports, Tencent Music will start taking investor orders early December. Tencent Music is said to have shaved its initial public offering (IPO) valuation to raise US$4 billion to US$2 billion but will continue to try for a company valuation of US$30 billion. Tencent owns 58% of Tencent Music.

In October, reports revealed that the Tencent Music had postponed its IPO until at least November, due to the ongoing selloff in global markets.

Tencent Music’s business model blends music streaming, video content, and social media. It owns around three-quarters of China’s music streaming market and claims to have more than 800 million monthly active users.

Quiet IPO narrative in New York in December

Even though the public listing comes from a large Chinese firm with an intended IPO size of over a billion dollars, the existing climate may not be an ideal period to IPO in New York.

Large investors are usually away during the festive year-end period and may be waiting for fresh deals next year that could count for a new year’s performance. According to data from financial solutions firm Refinitiv, only three companies have launched December offerings of more than US$1 billion in New York in the past decade.

Many Chinese technology companies in recent months which have rushed to IPO have met with lower valuations, amid the trade tensions between the United States (US) and China and the growing dissonance and distrust between both nations as seen in claims of hacking and insertion of spy chips over businesses’ hardware, among other news.

Tencent-backed online travel agent Tongcheng-Elong had set its IPO valuation around 30% lower than its earlier valuation in a May funding round. This year, Chinese firms have raised a total of US$7.9 billion in US IPOs.

Tencent’s shares rose 1.14% or HK$3.40, at HK$301.40, at 2.00pm Hong Kong time.

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