China's biggest streaming-music service reveals the details for its US IPO
- Tencent Music on Monday set the price for its US initial public offering after global markets got a boost from a truce in the US-and-China trade war.
- The company said American Depository Receipts will price between $13 and $15, helping it raise as much as $1.2 billion.
- The IPO was initially scheduled for October 18, but was postponed due to stock-market volatility.
- Monday's filing comes after President Donald Trump agreed to postpone new tariffs on Chinese imports by 90 days and Chinese President Xi Jinping agreed to buy a substantial amount of US goods and name Fentanyl a controlled substance.
Tencent Music Entertainment filed with the Securities and Exchange Commission on Monday to set the price for its US initial public offering - one day after President Donald Trump and Chinese President Xi Jinping announced a truce in the trade war between the US and China.
The China-based streaming-music service backed by tech giant Tencent said the offering price will be in the range of $13 and $15 per American Depository Receipt, helping it raise as much as $1.2 billion.
The IPO was initially scheduled for October 18, but the offering was postponed over fears that the brutal sell-off that wreaked havoc on markets in October and November would affect its pricing. Tencent Music was expected to have a $2 billion fundraising target, according to Reuters.
Monday's filing comes after global markets cheered a tentative truce on the trade tensions between the world's two largest economies. On Saturday, Trump agreed to postpone new tariffs on Chinese imports by three months and Xi said China would purchase "a not yet agreed upon, but very substantial" amount of US goods and label Fentanyl a controlled substance. The current 10% tariffs on $200 billion of Chinese imports will jump to 25% if an agreement isn't reached by the beginning of April, the White House said.
Tencent Music operates several popular music brands in China - including QQ Music, Kugou, Kuwo and WeSing - and had more than 800 million unique monthly active users in the second quarter of 2018, according to the filing.
For the year ended December 31, 2017, Tencent Music said it earned RMB1.32 billion ($199 million) on revenue of of 10.99 billion Chinese yuan ($1.66 billion).
The company also said it generated a profit of 2.11 billion Chinese yuan ($320 million) in the first half of this year, almost three times as much as its 732 million Chinese yuan profit during the same period in 2017.
For comparison, Spotify, which went public in April, said it had a net loss of 1.2 billion euros ($1.5 billion) in 2017, on revenue of 4.09 billion euros ($5 billion). Spotify was reportedly valued at $19 billion in the private markets prior to its IPO. It is now worth about $32 billion.
Tencent Music said it has been approved for listing on the New York Stock Exchange under the symbol "TME." It will begin trading on December 12, according to Reuters.
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