Kuaishou

The Chinese tech giant that has created video sharing app Kuaishou has set its financial standards high as it looks to raise over $4.95 billion in an initial public offering (IPO). This is believed to be the largest in Hong Kong for more than a year.

Kuaishou is an app where users can film short-form videos and live stream content. It gets most of its revenue from the live-streaming business and users can buy virtual items and present them as gifts to their favourite hosts.

According to Business Insider, the video-sharing mobile app is set to price 365.2 million shares at between 105 Hong Kong dollars ($13.55) and 115 Hong Kong dollars ($14.84).

Head of research at Aequitas, who publishes on the independent investment research network Smartkarma, Sumeet Singh, said the company used to make a profit but it ramped up its sales and marketing spending in 2019 and went into a loss.

“This spending should normalise over the next few years and it will be back in the black, competition permitting,” he further added.

“In our view, looking at where domestic and international peers are trading Kuaishou still offers decent upside from the IPO price.”

Kuaishou reported an adjusted revenue of $6.27 billion in the nine months to September 30 last year and an adjusted loss of 7.2 billion yuan, according to its filings to the Hong Kong exchange.

The final IPO price will be set on Friday and Kuaishou shares will start trading on the Hong Kong exchange on February 5.

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