Chinese music group withdraws $ 1 billion from Hong Kong IPO after tech crackdown


China’s second-largest music streaming service has canceled its initial $ 1 billion Hong Kong public offering. Indeed, concerns over increased regulatory crackdowns against Chinese tech groups have hurt investor confidence.

Cloud Village, a music streaming company of tech group NetEase, has said it will not proceed with the scheduled IPO this week due to disappointing investor reactions. According to one, the company was prepared to wait for better market conditions as it could resume listing plans.

The IPO was one of the biggest sales of shares in Hong Kong this year and was the first major sale of shares of a Chinese tech company since it launched in Beijing. Crackdown on registrations abroad last month.

Strict new rules from Chinese regulators Carpool company Didi Chuxing IPO in the United States In June, it caused a plunge in Chinese tech and internet groups. All planned U.S. IPOs by mainland Chinese companies are on hold.

The Wall Street Banker Has Started Redirect billions of dollars From the list planned from New York to Hong Kong following the effective freezing of the American list by the Chinese technology group.

But lack of investor motivation during Cloud Village’s IPO caused a storm in Hong Kong, where heightened tensions between Washington and Beijing have long sought to lure Chinese tech companies from the Nasdaq and New York stock exchanges. This may indicate that he cannot bring.

Chinese tech companies are expected to raise at least $ 9 billion in Hong Kong listing this year, according to Dealogic data.

Dicky Wong, head of research at Kingston Securities, said: Wong said he hoped more Chinese tech groups would postpone or cancel the listing plan in the coming months.

“Listing tech companies in China, whether they are in Hong Kong or not, is no longer an easy task. [or elsewhere], Because of regulatory risks, ”he added.

ByteDance, the Chinese parent company of TikTok, is preparing for an IPO in Hong Kong early next year. Reported by the Financial Times.. The listing plan has experienced delays and earlier this year it stopped preparing for a possible float in New York or Hong Kong following a data security warning from Chinese regulators.

Hong Kong fund managers said Cloud Village transactions appeared to be “struggling” last week. “The bankers asked us at what price we would buy it, rather than begging for an allowance,” said the fund manager.

A banker close to the deal said some of Cloud Village’s top investors would not agree to lock in the stock. As a result, it could not be sold for several months after the IPO.

Discussions with investors took place at the same time as the actions of the short Hong Kong-listed Kuaishou video app. Record 15% reduction After the post-IPO block expired last week and the underlying supporters sold out.

A last-minute U-turn at Cloud Village has come, despite antitrust regulators hitting rival Tencent, whose bankers expected to bolster the former’s reputation last month. On June 24, the China Market Regulatory Authority ordered Tencent Music to relinquish its exclusive rights to the music label within 30 days.

But NetEase was caught in a wave of selling tech stocks in China last week, as Beijing reported. Fight online games.. The share price of NetEase, the second largest games group in China after Tencent, has fallen about 11% since the news broke last Tuesday.

A person familiar with Cloud Village’s IPO plan said the company “carefully monitors market conditions and looks for the best launch window.” NetEase did not immediately respond to the request for comment.

Chinese music group withdraws $ 1 billion from Hong Kong IPO after tech crackdown Chinese music group withdraws $ 1 billion from Hong Kong IPO after tech crackdown


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