Tencent Music Entertainment on Tuesday priced its initial public offering at $13 per American Depository Receipt, the low end of its range, according to The Wall Street Journal, citing a person familiar with the matter.
Tencent Music sold 41 million ADRs while existing shareholders sold a further 40.9 million, the source said, asking not to be identified ahead of an official announcement. Video streaming company iQiyi Inc. leads with its US$2.4 billion listing, followed by online group discounter Pinduoduo Inc.at US$1.6 billion and electric vehicle maker NIO Inc.at US$1.15 billion.
That is the highest amount since 2014, the year of Alibaba Group's record $25 billion IPO.
In the coming year, major tech corporations from Uber to China's ByteDance are said to be considering IPOs - both to raise capital and offer longstanding backers an exit. It also can not be discounted that Tencent's immensely popular messaging app WeChat has played a critical role in increasing Tencent Music's outreach.
Although Tencent Music (a spin-out of Tencent Holdings) was forced to downsize its US IPO, it still managed to notch up an impressive valuation of $21.3 Bn.
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Tencent Music Entertainment Group provided the following description of their company for its IPO: " We are the largest online music entertainment platform in China, operating the top four music mobile apps in terms of mobile MAUs in the second quarter of 2018.
The Chinese company however has a more diverse business.
It focuses on online music through products such as QQ Music; online karaoke sites like WeSing; and livestreamed performances.
Its net income more than tripled in the first nine months of the year to US$394 million, while revenue nearly doubled to about US$2 billion, according to an exchange filing. Whereas Spotify listed while still incurring significant monthly losses, Tencent Music is already profitable. Spotify held about 8.9 per cent, the filing shows. Morgan Stanley, Goldman Sachs, JPMorgan Chase & Co, Deutsche Bank and Bank of America are among the underwriters of the offering.
Tencent Music will begin trading on the New York Stock Exchange today under the symbol "TME".