Kuaishou Files for IPO in Hong Kong amid Surge in Industry


Kuaishou has grown its Daily Active Users (DAUs) to 302 million and the revenue in that timeframe was up from 17.1 billion yuan reported in the first half of 2019 to 25.3 billion yuan ($3.8 billion) this year.

Chinese video-sharing platform Kuaishou has filed for an Initial Public Offering (IPO) in Hong Kong amid a bubbling surge in the video content and live streaming industry. Per a CNBC report, the Kuaishou IPO billed for the Hong Kong Stock Exchange is excepted to aid the company to pull about 5 billion United States dollars.

The coronavirus pandemic has changed the way most people live which transcends the traditional offerings from social media platforms including Facebook Inc (NASDAQ: FB), Twitter Inc (NASDAQ: TWTR). The switch from active daily living as seen prior to the coming of the COVID-19, down to that with a full embrace of social media entertainments particularly short video sharing has taken the center stage in the past months.

The userbase of social video sharing platforms including ByteDance’s TikTok and the Chinese version Douyin, Bilibili, and Kuaishou has suggested the change in preference for mere communication via chatting to more creative engagements as offered by these platforms. The growth in adoption and virality of these platforms have benefitted Kuaishou in particular and as such informing its planned IPO.

Per the report, Kuaishou has grown its Daily Active Users (DAUs) to 302 million as seen in the first six months of 2020, and the revenue in that timeframe was up from the reported 17.1 billion yuan in the first half of 2019 to 25.3 billion yuan ($3.8 billion) this year. The underwriters listed for the Kuaishou IPO include Morgan Stanley (NYSE: MS), Bank of America Corp (NYSE: BAC), and China Renaissance Holdings Ltd (HKG: 1911).

Kuaishou Seeks Further Expansion via IPO amid Stiff Competition

The short social video-sharing ecosystem particularly in China features key industry giants including Tencent Holdings Ltd (HKG: 0700) backed Bilibili Inc (NASDAQ: BILI), IQIYI Inc (NASDAQ: IQ), and Douyin.

Each of these platforms has its own specialized feature that distinguishes it from the others and the earning model though similar has slight distinctions. While Kuaishou has been tagged as one of the indispensable apps in the space, its IPO pursuit will further put it on a bigger growth path as it will draw funds from more investors to scale up its operations.

“We believe short video plays Douyin and Kuaishou since they entered the Live field, have reshaped China’s Live landscape causing mounting pressure on the existing plays,” Jialong Shi, head of China internet and new media research at Nomura, said in an email last week, referring to the livestreaming sector.

Despite Kuaishou eying its IPO, it should be noted that its two publicly listed competitors iQiyi and Bilibili have been operating at a loss according to CNBC, despite their shares being up 140% and 20% respectively. With Kuaishou’s IPO coming in Hong Kong where the platform has a considerable user base, perhaps the public listing will usher the platform into a new profit era. 

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