By Gina Lee
Investing.com – Kuaishou Technology (HK:1024), which operates the most popular short-video service in China after ByteDance Ltd.’s Douyin, soared 194% in its $5.4 billion Hong Kong Stock Exchange debut.
Shares in the Tencent Holdings (OTC:TCEHY) Ltd.-backed firm were at HK$303.60 ($39.16) by 11:23 PM ET (4:23 AM GMT), after soaring up to HK$345. They opened at HK$338 against the IPO price of $115 and valuing the company at $179 billion.
Morgan Stanley (NYSE:MS), Bank of America Corp (NYSE:BAC). and China Renaissance acted as joint sponsors of the deal.
The deal was the biggest internet IPO globally since Uber Technologies (NYSE:UBER) Inc raised $8.1 billion via its U.S. share sale in May 2019, after Kuaishou sold around 365 million shares at the top of its price range.
Bytedance, reportedly in talks to list some of its own assets in Hong Kong, will no doubt be encouraged by its rival’s success. 2020 has been a hard hear for the company, long rumored to be an IPO candidate, after it was labelled a national security threat and banned in the U.S.
“A successful listing by Kuaishou will pave the way for its larger rival. Douyin will be more motivated to come to the market and investors can get better insight into China’s short-video industry with Kuaishou’s regular disclosures going forward,”said Bloomberg Intelligence senior analyst Vey-Sern Ling.
The company was founded by Su Hua, a former Google (NASDAQ:GOOGL) employee, and Cheng Yixiao, in 2011, starting life as an app built around sharing animated GIF images. It made the move to short video in 2013, with live streaming following in 2016. The company recorded an average of 264 million daily active users on its main Kuaishou app as of November 2020, according to its prospectus, less than half of Douyin’s 600 million users.