No Rest For Hong Kong Investment Bankers As Kuaishou IPO Skyrockets
Brendan Ahern, 05 February 2021
Tencent-backed ByteDance rival Kuaishou Technology (1024 HK) ripped +160% in its Hong Kong IPO today in the second-best IPO performance ever behind Alibaba’s +193% gain back in 2007 (BABA went private before going public again in 2014). The company raised $5.4B from investors. Yesterday we did a deep dive on the company, which you can access here.
The value traded in Kuaishou was nearly 3X the second most traded stock worth $4.84 billion as 119 million shares traded hands today. Several brokers noted the company’s market cap of $158 billion is more than three Hong Kong banks, HSBC, Standard Chartered, and Hang Seng, combined! The Hong Kong IPO frenzy is going to continue with rumors overnight that Tencent Music Entertainment TME -4% is working on a Hong Kong IPO along with Baidu BIDU -0.3%. Bloomberg noted that ByteDance might want to take advantage of the valuation given to Kuaishou and pursue an IPO itself, similar to when Uber UBER +2% went public after seeing Lyft’s LYFT +0.2% success at doing so.
Asian equities were largely higher today though Mainland China was off, continuing a similar pattern all week. However, if you look below, the Mainland was flat for the week. A Mainland bond broker noted the unusual phenomenon of both Mainland stocks and bonds going down this week, indicating some profit-taking/cash being raised in advance of Chinese New Year next week. Health care had a strong day on reports demand for PPE is leading to rising prices.
