The music-streaming arm of Chinese conglomerate, Tencent, has been mulling public listing for some time, but the plans were getting delayed by the escalating trade war between the US and China. However, now that US President Donald Trump and Chinese counterpart Xi Jinping have found a common ground at the Argentina G20 Summit, the company intends to start trading this month.
Tencent Music Entertainment will file for an initial public offering today and will start trading on December 12 on either Nasdaq or NYSE, according to reports from Chinese media houses. The offer price will be set in the range of $13 to $15.
The company aims to achieve a valuation of about $25 billion, by raising approximately $1.2 billion through the offering, which is touted to be one of the biggest this year.
The Shenzhen, China-headquartered company, which competes with Spotify (SPOT), notably holds a 7.5% stake in this rival. Similarly, Spotify is a major shareholder of Tencent Music with a 9% stake. The holdings were acquired as part of a stake swap last year.
Trump effect and trade war: Retaliatory tariffs by the world on United States in 2018
Tencent Music, which boasts of 800 million monthly active users, had earned $199 million in 2017. Revenue for this period stood at $1.7 billion, as per the filings submitted for the IPO. In the first half of this year alone, the company recorded profits of $263 million, on a top line of $1.3 billion.
Earlier on Saturday, Trump and Jinping agreed to temporarily put a hold on new tariffs on imports for 90 days at the G20 Summit in Buenos Aires. The two sides have also agreed to intensify dialogue and bring a permanent resolution to the soured relationship.
Most Chinese stocks listed in the US, including Alibaba (BABA), Baidu (BIDU) and Weibo (WB) surged as trading opened on Monday. The stocks have been battered by investors throughout this year due to trade-war concerns, despite strong operational performance.
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