The public listing values TME at $21.3 billion, falling shy of rival Spotify’s $23.3 billion in valuation. Notably, Spotify (SPOT) is a major shareholder in TME with a 7.5% stake, while TME owns a 9% stake in the Swedish music streaming giant.
Data reveals that 2018 was the biggest year for Chinese IPOs since 2014 when Alibaba Group (BABA) debuted on the New York Stock Exchange. A total of about $9 billion has been raised by Chinese companies so far this year through a public listing.
TME, which is backed by Chinese conglomerate Tencent Holdings, boasts of over 800 million monthly active users and owns popular applications such as QQ Music, We Sing and Kuwo.
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Unlike its rival Spotify, Tencent Music has been highly profitable. In the first three quarters of 2018, the company almost doubled its revenue to $2 billion, while earnings more-than-tripled to $394 million. During this same period, Spotify has lost about $520 million.
Although the company has been planning to go public in October, the plans were delayed by the escalating trade war situation between the US and China. However, since both the countries agreed on a temporary true at the G20 Summit in Buenos Aires, TME took this as a positive sign.