Communication Author：孙美娜 Editor：马渭淞 Aug 16, 2021 06:05 PM (GMT+8)

The music streaming arm of Tencent has lost almost 70% of its market value since the stock peaked in March 2021.

Headphone music

The rumors of the Hong Kong IPO have been around for a while now. In December 2020, Ou Zhenxing, Deloitte's managing partner in South China, predicted that more than 10 Chinese concept shares listed in the United States would be listed in Hong Kong for the second time in 2021, including Tencent music.

In addition, on January 12, 2021, Reuters media IFR reported that Tencent music was considering a secondary listing in Hong Kong. In February of the same year, according to Bloomberg, Tencent music selected JPMorgan Chase and Morgan Stanley to plan its listing in Hong Kong, raising up to USD 5 billion. 

Upon being asked Tencent music refused to make any comments on the news.

Tencent Music's shift comes after prime rival Cloud Village, a unit of gaming company NetEase, decided last week to delay its initial public offering of up to USD 1 billion in shares in Hong Kong after encountering tepid feedback in preliminary meetings with investors.

Due in part to its dominance of China's streaming market, Tencent Music has been a target of competition regulators, who have turned their focus to the country's online platforms in recent months. Last month, the company was ordered to give up all exclusive music streaming rights within 30 days and fined CNY 500,000 for unfair market practices.

Founded in July 2016, Tencent music covers four major products, mainly providing online music services and social entertainment services. At present, Tencent music has more than 800 million monthly live users and is a giant in China's music and entertainment industry.

Tencent music completed its US IPO in December 2018 priced at USD 13, raising a total of USD 1.06 billion. 

Since March 2021, Tencent music's share price has reached USD 32.75/share. As of the closing of US stocks on August 14, Tencent music's share price had dropped to USD 9.8/share, a decline of 70% in about five months.

The sharp drop in the share price of Tencent music may be related to the request of relevant domestic departments to remove its exclusive music copyright. On July 24, the State Administration of Market Supervision issued a decision on administrative punishment against Tencent for Tencent's acquisition of China Music Group in 2016.

 


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