Ahead of the Tencent’s upcoming regulatory filing, we provide a brief overview of three of the largest initial public offerings (IPOs) from 2020 in which the China-based internet company either scored an exit or increased its stake.
China-based video streaming platform developer Kuaishou Technology raised $5.4bn in its IPO on the Hong Kong Stock Exchange that scored exits for internet groups Tencent and Baidu. The company issued about 365 million shares priced at HK$115 ($14.83) each. Its shares leapt to HK$338m but closed at HK$300.00, giving it a market cap of roughly $160bn. Founded in 2011, Kuaishou has built an app that enables its youthful user base to post and share images and videos. It has also crossed over into livestreaming, having more than 400 million users, of which it claims more than 300 million daily active users. Its chief rival, Douyin, is better known internationally as TikTok.
Tencent scored an exit also when China-headquartered lifestyle product retailer Miniso floated on the New York Stock Exchange in a $608m IPO. It consisted of 30.4 million American Depositary Shares (ADSs), each representing four common shares, priced at $20.00 each, above the $16.50 to $18.50 range the company had set for the offering. Founded in 2013, Miniso operates a chain of low-cost retail stores, specialising in a range of affordable goods including toys, accessories, snacks, cosmetics and small electronics. It boasts a network of 4,200 stores spanning some 80 countries, roughly 2,500 of which located in China. Although the company’s revenue for the first six months of 2020 declined slightly year on year to $1.27bn in the midst of the coronavirus pandemic, its net loss also fell, to $36.8m over the same period.
KE Holdings, the China-based online estate agent also known as Beike, went public in a $2.12bn IPO in which Tencent committed $160m. The offering consisted of 106 million ADSs, each equating to three ordinary shares, that were issued on the New York Stock Exchange priced at $20.00 each. The price is above the $17 to $19 range the company had set, valuing it at about $22.6bn. Tencent purchased 8 million ADSs. KE Holdings was formed in 2001 as real estate brokerage Lianjia before adding Beike as an online and offline platform that manages real estate transactions. The combined platform provides access to 260 real estate brokerage brands and had 39 million monthly active users. The company increased revenue 39% to approximately $3.86bn in the first six months of 2020 while almost tripling net income to more than $227m.
The GCV Analytics bubble chart here illustrates Tencent’s exits, partial and complete, since the beginning of 2018 as well as IPOs in which it has participated in. Notably, there are partial stakes that Tencent holds in emerging businesses that have gone public, which Tencent has acquired and maintained long after the flotation or any expected lock up period.
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