Tencent Music Entertainment Delays IPO Due To Market Conditions

Tencent Music Entertainment

Tencent Music Entertainment Group has put off its initial public offering until at least November, according to a report by Wall Street Journal.

Sources familiar with the matter told the Journal that the company has decided to postpone the offering over concerns that the ongoing global markets sell-off could affect its pricing.

Shares of the company were expected to start trading during the week of October 22. It filed its paperwork with the U.S. Securities and Exchange Commission (SEC) last week for its eagerly awaited offering.

According to the prospectus, the firm plans to list American depositary shares on the Nasdaq Global Select Market or the New York Stock Exchange (NYSE) under the TME ticker symbol. The company has yet to issue a price range, regardless.

Tencent Music is seeking to raise as much as $1 billion in what might be the biggest offering in the U.S. of 2018. It is also expected to be the biggest offering by a Chinese company in the U.S. after Alibaba successfully raised more than $20 billion four years ago.

According to its prospectus, it had a post-tax profit of $263 million in the first half of 2018, representing an increase of 341% from the same period last year. Revenue came in at $1.3 billion in the first half of this year, up 92% from the same period in fiscal 2017.

The music-streaming company is controlled by Chinese-based Tencent Holdings Ltd, with a stake of 58 percent. Spotify Technology SA, which went public earlier on the NYSE earlier this year, also has a stake of 9 percent in the company. Warner Music and Sony Music have also invested $200 million in the Tencent Music prior to the offering.

Tencent Music operates a music-streaming platform and also offers online karaoke services. The company commands 78 percent of the market share for music streaming companies in China. It owns the three most popular music apps in the country by daily-active-users, namely WeSing, QQ Music, and Kugou.

Tencent Music Company Profile

Tencent Music Entertainment Group provides online music services, such as digital music players, mobile online karaoke, live music shows, copyright delegation, advertisements, and other music derivative business.

The company is based in China. Tencent Music Entertainment Group operates as a subsidiary of Tencent Holdings Limited. – Bloomberg