ByteDance is avoiding US financial markets amid ongoing political tensions with China and has instead chosen to hold its IPO on the Hong Kong Stock Exchange. According to Caixin, the prospectus will be submitted in the second quarter
The owner of TikTok, whose shares are privately traded at levels valued at $ 300 billion, declined to comment.
ByteDance has decided against a US listing because the risks on concept stocks have increased significantly over the past year and could cause ByteDance’s state shareholders to violate the US regulatory environment.
In October, Caixin reported that ByteDance was considering outsourcing Douyin, TikTok’s mainland China twin, for a listing in Hong Kong in the first half of 2021, but sources said the plan is now on hold. ByteDance is expected to list all of its domestic and international business.
As of August 2020, half of Chinese internet users logged into Douyin daily, while Tiktok’s monthly active users in Europe and the US exceeded 200 million.
According to the consulting firm Sensor Tower, TikTok was downloaded 961 million times worldwide on December 17 last year and had sales of over $ 1.2 billion.
At $ 300 billion, ByteDance would overtake Meituan to become the third largest listed company in Hong Kong after Tencent Holdings and Alibaba Group Holding. Based on Wednesday’s closing price, Tencent ($ 765 billion), Alibaba ($ 662 billion) and Meituan ($ 218 billion) are the top three market cap companies on the Hong Kong Stock Exchange.
ByteDance was valued at $ 180 billion in its last funding round in December. US private equity firms Sequoia Capital and KKR led the financing.
ByteDance is currently 40% owned by four US investors. Other investors are SIG Asia Investment, General Atlantic and the technology-oriented investment manager Coatue.
In addition to the flagship short video apps Douyin and TikTok, Bytedance has launched numerous other apps, including the news aggregation platform Jinri Toutiao, the car information app Dongchedi and the online education platform Dali Educatioremote Workte-Work-App Lark, known as Feishu in China .
The company’s products occupy an increasing chunk of the average Chinese mobile internet user’s online time – around 16%, second only to Tencent Holdings’ share of 36% at the end of 2020, according to app data specQuestMobiletmobile. Tencent owns the multifunction messaging and payment app WeChat.
Last year, ByteDance became China’s largest advertising platform with sales of 150 billion yuan ($ 23 billion), compared to the less than 100 billion yuan generated by Tencent.
Douyin claims its e-commerce business grew more than twelve-fold by gross merchandise value in 2020. The GMV of products sold through Douyin is said to have ranged from 170 to 180 billion yuan last year, according to several Douyin distributors and institutional partners from Caixin. That number is expected to reach 300 billion yuan this year. ByteDance did not confirm the number.
Last month, ByteDance selected Chew Shou Zi, former international business president of smartphone giant Xiaomi, as its chief financial officer. Chew oversaw Xiaomi’s IPO as its chief financial officer in 2018. His appointment has sparked speculation about ByteDance’s plans to go public.
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Caixinglobal.com is the English-language online news portal of the Chinese financial and business news media group Caixin. Nikkei agreed with the company to exchange articles in English.
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