Kuaishou Technology, an online video company based in China, is working towards raising an amount between $4.95 billion and $5.42 billion as part of an initial public offering (IPO). According to a Reuters reviewed term sheet, this could be the largest IPO in Hong Kong in over a year.
Kuaishou Technology is backed by Tencent Holdings Ltd and has managed to build a good presence for itself in the Chinese market. According to the term sheet, the company will value 365.2 million shares between a range of 105 ($13.55) and 115 Hong Kong dollars.
After listing the shares, the company has an option to sell 54.78 million shares in a span of thirty days. If they choose to do this, the total amount thus raised could be between $5.7 billion and $6.2 billion.
According to the IPO, Kuaishou will be valued between $55.6 billion and $60 billion. If the company decides to sell off the extra shares at its disposal, it would result in its market capitalization between $56.3 billion and $61.7 billion. In the year 2019, when the company managed to raise an amount of $3 billion from backers, it was valued at $30 billion.
Capital Group led a group of ten shareholders who have now become cornerstone investors in the company. According to the term sheet, the total value of their shares is close to $2.45 billion. If Kuaishou Technology manages to raise $6.2 billion, it will surpass the largest IPO in Hong Kong in recent times.
The $5.75 billion IPO by Budweiser Brewing Company in September 2019 has been the largest IPO in Hong Kong in the last several years. If one goes a little back in time, some of the largest IPOs raised by a company include the $7.4 billion raised by China Tower Corp in August 2018.
If Kuaishou’s deal comes through, it is most likely to be the largest IPO raised by a digital company since Uber Technologies. Uber had raised an IPO of $8.1 billion in May 2019.
Kuaishou is a Chinese term that roughly translates to ‘fast hand’ in English. It runs apps that enable its users to upload videos. It also gives one the option to promote their business through activities like streaming live videos.
The final price of the IPO will be decided on Friday and the shares owned by Kuaishou will be traded on the Hong Kong exchange on February 5.