China’s Kuaishou Launches Biggest Tech IPO Since Alibaba’s Aborted Ant Listing

Kuaishou, one of China’s online social media titans, has launched the country’s biggest IPO since Alibaba Group’s aborted listing of its financial services arm Ant Group in November.

Kuaishou, most popular for short-form videos, is looking to sell 365.2 million shares at up to HK$115 each, raising HK$42 billion, or $5.4 billion. Main shareholders include cofounders Su Hua, the CEO,  and Chen Yixiao, the chief product officer – both already billionaires – as well as China Internet heavyweight Tencent, along with funds associated with Morningside, DCM and DST.

In the nine months ended Sept. 30, Kuaishou attracted 305 million daily average users and 769 million monthly average users of its apps and mini programs. Users on the popular platform spent an average of more than 86 minutes per day on the Kuaishou App and accessed the app more than 10 times a day, according to iResearch figures in the prospectus.   The company has tapped into the huge popularity of short-form video in China. Mobile internet users in China on average spent 4.35 hours online each day in 2019, compared to 2.90 hours in 2015, and are expected to spend 5.73 hours online each day by 2025, iResearch says. Approximately 29.7% of that time was spent on video-based social and entertainment platforms in 2019, which is expected to reach 36.3% by 2025. Kuaishou’s rivals include ByteDance, best known in the U.S. for its TikTok platform.

Su will control 483 million shares, or an 11.6% stake, in Kuaishou  that would be worth $7.1 billion at the maximum offering price. Chen Yixiao, co-founder and chief product officer, would control 382.6 million shares or 9.4% that would be worth $5.7 billion. Su was worth $4 billion on the 2020 Forbes China Rich List; Chen was worth $3 billion.

Trading is expected to start at the Hong Kong Stock Exchange on Friday, Feb. 5.

Cornerstone investors buying shares in the IPO include funds associated with the Capital Group, Temasek, Invesco, Fidelity International, Blackrock, Boyu Capital, Morgan Stanley and the Abu Dhabi Investment Authority.

Alibaba Group’s Ant IPO was postponed amid regulatory concerns.

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