Shares closed at 300 Hong Kong dollars ($ 38.70) apiece, a jump of 161% from the 115 Hong Kong dollars ($ 14.80) the firm issued. It raised a total of 41.28 billion Hong Kong dollars ($ 5.32 billion) in the offer.
If the company uses an option for an overpayment, the total amount could be Hong Kong $ 47 billion (almost $ 6.1 billion).
According to data provider Eikon Refinitiv, this is the world’s largest technology listing since Uber’s IPO in May 2019, and the largest public offering since Saudi Aramco in December 2019.
Kuaishou is one of China’s leading social media companies. The company, supported by Tencent, whose name means ‘quick hand’ in Chinese, owns a short-term video and live app of the same name. Its platforms and gadgets have more than 300 million active users daily.
It earns most of its revenue from the live streaming business, where users can buy virtual items and present them as gifts to their favorite hosts. Live streaming transactions accounted for 84% of revenue in 2019, according to a stock exchange submission. It also earns money from online advertising.
The company has been expected to list for months. In a documentation this week, it is said that the offer was heavily oversubscribed.
“It’s an incredible outcome,” said David Chao, co-founder and general partner of DCM, a $ 4 billion-run Silicon Valley business. His company was one of the earliest investors in Kuaishou, leading one of its first rounds of financing in 2014.
DCM still has a 9.2% stake in the social network, which was worth more than $ 14 billion at current market value on Friday. The firm said it would return about 600 times its original investment.
By concentrating early on on the rise of live and virtual goods, Chao said the company was taking advantage of “a new form of monetization that the US is only now beginning to understand.”
Kuaishou is the latest company to make a splash by announcing in Hong Kong, which has done the redesign over the past year, as a popular venue for Chinese technology companies.
Since 2019, Alibaba (BABY), NetEase (NTES) and JD.com (JD) all held secondary listings in the Asian financial center. The city also made changes last year to attract even more companies. The index compiler Hang Seng Indexes, for example, has launched a Nasdaq-like technology index to track the city’s largest technology companies trading in the city.
Although the listing is a big win, Kuaishou still faces big challenges. It has long competed with industry leader ByteDance, which owns the Douyin app – the Chinese version of TikTok.
The listing also comes at a time when the technology sector in China is facing a regulatory constraint. In his prospectus, Kuaishou referred to the risk, pointing to “the fact that the Internet industry in China is heavily regulated.”
– Laura He and Jill Disis contributed to this report.
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