Tencent Music Entertainment Group has filed an amended F-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company expects to price its 82 million American depositary shares (ADSs) in the range of $13 to $15 a piece, with an overallotment option for an additional 12.3 million ADSs. At the maximum price, the entire offering is valued up to $1.41 billion. Each ADS represents two Class A ordinary shares of Tencent. The company intends to list its ADSs 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 nine months ended September 30, 2018, our revenue reached RMB13,588 million (US$1,978 million) compared to RMB7,395 million in the same period in 2017. In the nine months ended September 30, 2017 and 2018, our profit for the period amounted to RMB785 million and RMB2,707 million (US$394 million), respectively. Our adjusted profit increased from RMB1,239 million in the nine months ended September 30, 2017 to RMB3,257 million (US$474 million) in the nine months ended September 30, 2018. From 2016 to 2017, our revenue increased from RMB4,361 million to RMB10,981 million (US$1,599 million). In 2016 and 2017, we reported profit for the year of RMB85 million and RMB1,319 million (US$192 million), respectively, and recorded adjusted profit for the year of RMB426 million and RMB1,904 million (US$277 million), respectively.
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.