China's Tencent Music aims for $1bn Wall Street IPO
By Caoimhe Toman
Date: Wednesday 03 Oct 2018
(Sharecast News) - China's largest music streaming service, Tencent Music Entertainment, is set to go public in the US with a $1bn IPO which could raise the value of the company to $30bn becoming one of the largest tech flotations in recent years.
The company's initial target was to raise $1bn, although it could manage a raise double that figure.
Unlike rivals Apple Music and Spotify, Tencent Music is profitable and reported it had made around $260m in profit in the first half of 2018 on revenue of $1.3bn.
Most of the revenue came from "social entertainment services" which include live streaming and online karaoke. Tencent Music houses four music screaming services, Q Music, Kugou Music, Kuwo Music and WeSing.
Tencent Holdings, which owns Chinese streaming business among several other digital services, formed a strategic alliance with Spotify last year, with the Swedish streaming service taking 9% of Tencent Music Entertainment, with parent Tencent in turn getting 7.5% of Spotify.
The service has around 800m users and the company said it expected the number of people who pay for music in China to quadruple between 2017 and 2023.
Tencent Music follows a number of tech companies that are majority or substantially owned by a Chinese giant and are going public in the US. Baidu's iQiyi service, Xiaomi-backed Huami and Viomi are a few examples.
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