Chinese short video platform Kuaishou will issue 365 million shares in a Hong Kong IPO at HK$105-115 per share, raising up to $5.4 billion, according to Bloomberg.
The valuation of Kuaishou's IPO will range from $55.6 billion to $60.9 billion, rising to a maximum of $61.7 billion after the greenshoe mechanism is exercised, according to the Hong Kong Economic Journal.
Kuaishou will probably be listed on February 5 and has already attracted 10 cornerstone investors including BlackRock and Abu Dhabi Investment Authority. Its total subscription volume has reached $2.45 billion, based on the median number of the reference offering price, Bloomberg reported.
On November 5 last year, Kuaishoufiled its IPO prospectus with the Hong Kong Stock Exchange, with co-sponsors Morgan Stanley, Bank of America Securities, and Huaxing Growth Capital. This means that Kuaishou is finally about to become the "first stock of short video" in the capital market ahead of Douyin, the Chinese version of TikTok.
Kuaishou's core business--live streaming, launched in 2016, remains its main source of revenue, reaching 17.3 billion yuan in the first six months of 2020, accounting for 68.5% of total revenue.
In the first half of 2020, users conducted nearly 1 billion live-streaming activities on the Kuaishou app, driving Kuaishou to become "the world's largest live-streaming platform in terms of virtual gift bounty flow and average monthly paid users for live-streaming," according to a prospectus released by Kuaishou in November.
Meanwhile, in the "third pole" of Kuaishou's revenue structure, the e-commerce business, which only started in 2018, is growing at a high rate and has great potential. For the six months ended June 30, 2020, Kuaishou was the world's second-largest live e-commerce platform in terms of gross merchandise volume (GMV), according to consulting firm iResearch.
But the latest data released in the prospectus shows that Kuaishou had little growth in daily active users from February to June last year, which could be one of its biggest concerns.
Kuaishou's last published prospectus showed that as of the end of June last year, Kuaishou's Chinese apps and applets had an average of 302 million daily active users and an average of 776 million monthly active users.
And back in February last year, Kuaishou had already announced in the high profile that its daily active users exceeded 300 million. This also means that the number of its daily active users grew minimally in the months from February to June.
On Jan. 24, Kuaishou updated its prospectus to extend the period covered by its core business data to November.
The newly updated prospectus showed that Kuaishou had revenue of RMB 52.5 billion and gross profit of RMB 20.9 billion for the first 11 months of 2020, with a gross margin of 39.9%. Its loss, on the other hand, continued to widen to RMB 9.4 billion.
In terms of product metrics, Kuaishou's daily active users declined to 263 million, monthly active users declined to 481 million, and e-commerce GMV was RMB 332.6 billion as of November 2020.
Kuaishou further emphasized that it will continue to invest more in sales and marketing expenses and ecosystem in the future, and expects net losses to increase in 2020 compared to the previous year, with no guarantee of profitability in the near future.
Short video platform Kuaishou IPO will create thousands of millionaires
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