Tencent Music Files for IPO

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Tencent Music Entertainment Group has filed an F-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the filing, although the offering is valued up to $1.0 billion. The company intends to list its American depositary shares on the Nasdaq under the symbol TME.

The underwriters for the offering are Merrill Lynch, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley, Allen, BOCI, CICC, China Renaissance, Credit Suisse, HSBC, KeyBanc Capital Markets and Stifel.

This company is the largest online music entertainment platform in China, operating the top four music mobile apps in terms of mobile monthly active users (MAUs) in the second quarter of 2018. This platform comprises the Tencent’s online music, online karaoke and music-centric live streaming services, supported by its content offerings, technology and data.

The platform boasted over 800 million total unique MAUs in the second quarter of 2018. Each daily active user on average spent over 70 minutes per day on the platform in the second quarter of 2018.

In terms of its finances, the company detailed:

In the six months ended June 30, 2018, our revenue reached RMB8,619 million (US$1,303 million) compared to RMB4,485 million in the same period in 2017. In the six months ended June 30, 2017 and 2018, our profit for the period amounted to RMB395 million and RMB1,743 million (US$263 million), respectively. Our adjusted profit increased from RMB732 million in the six months ended June 30, 2017 to RMB2,112 million (US$320 million) in the six months ended June 30, 2018. From 2016 to 2017, our revenue increased from RMB4,361 million to RMB10,981 million (US$1,659 million).

The company intends to use the net proceeds from the offering to enhance its platform, expand its offerings and strengthen its marketing. The remainder will be put toward working capital and general corporate purposes.