Tencent Music IPO details revealed

Visitors
are seen at a booth of Tencent Music Entertainment at the Beijing
Music and Life Show in Beijing, China, May 7,
2017.
Stringer/REUTERS

• 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.
O
n 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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