Short Video App Kuaishou Seeks up to $5.4B in Hong Kong IPO

Short video startup Kuaishou Technology is aiming to raise as much as $5.4 billion in its initial public offering, potentially becoming the largest IPO in Hong Kong since late 2019.

The short video startup, backed by Tencent Holdings Ltd., will price 365.2 million shares at HK$105 to HK$115 ($13.5 to $14.8) each, according to Bloomberg and Reuters citing the terms of the deal. The final price will be set on Friday and the shares will begin trading on Feb. 5.

If Kuaishou triggers the greenshoe option, which will allow underwriters to issue more shares than originally planned based on demand, the firm can sell a further 54.78 million shares in the 30 days after listing that could bring the total amount raised up to $6.2 billion.

If so, it will become Hong Kong’s largest IPO since Budweiser Brewing Company’s $5.75 billion float in September 2019.

Kuaishou’s 10 cornerstone investors — including The Capital Group, Temasek Holdings, GIC, BlackRock and Abu Dhabi Investment Authority — are expected to buy up to US$2.45 billion shares.

The offering could bring the company’s valuation to $60 billion, pre greenshoe, up from the $28.6 billion it achieved in a funding round last year. If the greenshoe option is fully exercised, it would boost Kuaishou’s capitalization to as much as $61.7 billion.

SEE ALSO: Kuaishou Passes HKEX Hearing, Plans to List in Hong Kong on Feb. 5

Kuaishou, which allows users to upload short videos and host live-streaming programs, had about 262 million average daily active users as of September, according to its prospectus. In China, it has a particularly strong user base among users in lower-tier cities and rural communities. Its rival Douyin, owned by Beijing-based ByteDance, has 600 million.

Livestreaming sales, online marketing services, e-commerce business and online games constitute the main source of revenue for the firm.

Kuaishou will use the funds for research and development, acquisitions and investment and expanding its ecosystem, according to the term sheet.