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Shares in Chinese short video app Kuaishou began trading in Hong Kong on Friday, surging almost 200% at the open, from $14.83 to $43.60 at mid-morning local time.
Kuaishou raised $5.4 billion, making it the largest Internet IPO since Uber’s float in May 2019 and the biggest listing in Hong Kong since e-commerce giant JD.com’s secondary offering in June 2020, which raised $3.9 billion.
The IPO is a coup for Hong Kong’s stock exchange, which has sought to court big tech startups for the last couple years. Kuaishou is the first Chinese short video app to go public, beating out rival Douyin, the TikTok sister app owned by Beijing-based tech unicorn ByteDance Ltd.
The Chinese government’s recent tightening of regulations on technology companies, including greater scrutiny of content on Kuaishou and other video and streaming apps, hasn’t seemed to dent investor enthusiasm.
Impressive growth and name brand recognition piqued investor interest in Kuaishou. The firm set its final share offer price at the top end of its range, it attracted retail investors who oversubscribed to the IPO 1,200 times, and it raised $5.4 billion before it started trading on Friday.
The platform is known for its popularity in China’s smaller, lower-tier cities and for promoting content from people in rural areas. Most of Kuaishou’s revenue comes from virtual gifts that users send to their favorite content creators, who post short videos and conduct livestreams. The app is expanding into e-commerce, which it launched in 2018.
Kuaishou could be the first in a spate of Chinese short video company IPOs. Bilibili and iQiyi, two Nasdaq-listed short video platforms, are reportedly seeking secondary listings in Hong Kong this year. In November, ByteDance was also reportedly considering a Hong Kong IPO, possibly as a whole company or by spinning off Douyin to float as a separate firm.
