ByteDance’s rival files for $5bn Hong Kong IPO

Kuaishou Technology has filed a credit card applicatoin for a Hong Kong initial public offering, heading toward an inventory that could raise around $5 billion and beat larger rival ByteDance to market.

Kuaishou, or “fast hand,” reported earnings climbed 48 % to 25.3bn yuan ($3.8bn) in 2020’s first half, underlining the scorching pace of growth of a Chinese short video market. The Tencent Holdings-backed start-up is angling for a valuation of $50bn in an offering when the end of the year, almost twice its current price, sources said.

Kuaishou’s impending debut raises hopes the location will continue steadily to attract listings from prominent internet companies regardless of the derailment of an extremely anticipated debut by Jack Ma’s Ant Group. ByteDance itself is reported to be in discussions to improve $2bn before listing some of its businesses in Hong Kong, potentially as early as next year.

The two represent a generation of private Chinese start-ups that’ve risen to the fore thanks to a surge in a nutshell video, challenging the dominance of Tencent and Alibaba Group Holding. Kuaishou established its popularity among users in smaller cities and rural areas, with persons streaming slices of everyday life from harvesting corn to slurping noodles. It’s since expanded to audiences in bigger cities, hosting content which range from people playing video gaming to teenagers lip-syncing songs, much like ByteDance’s TikTok and Douyin.

Access to Kuaishou’s main app is free, with revenue made from a cut of the tips users give their favourite live-streaming performers. At $50bn, the business - last valued by Pitchbook at $28.6bn after a February funding round - would surpass SpaceX and Airbnb to be the world’s third most effective start-up, according to CB Insights.

Morgan Stanley, Bank of America and China Renaissance Holdings are joint sponsors of Kuaishou’s proposed IPO, according to pre-listing documents posted on the Hong Kong stock exchange’s website on Thursday. Tencent includes a 21.6 % stake in Kuaishou, and other backers include capital raising organizations DCM, DST Global and Sequoia Capital China, in line with the filing. Leader Su Hua has 12.6 per cent, while founder Cheng Yixiao has 10 %.

The business has been increasingly expanding into advertising and e-commerce. Its applications had 776 million average monthly active users in the first half of the entire year, according to Thursday’s filing. Active users spent an average of a lot more than 85 minutes daily on its main app.