Tencent Music plans to go public on US exchange

This story was originally published on October 2, 2018.

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Tencent Music has filed plans to go public in the United States, in what could be one of the largest recent U.S. IPOs by a Chinese company.

According to the SEC filing, the company set a placeholder target of $1 billion, which could value the company at between $25 and $30 billion.

The amount would make it the third-largest Chinese IPO to list in the United States since the beginning of 2018, according to data provider Dealogic. Netflix-like video platform iQIYI raised $2.3 billion and social shopping app Pinduoduo raised $1.6 billion.

Tencent Music dominates the music streaming market in China through its Spotify-like apps. The company revealed in its SEC filing that its music apps have more than 800 million monthly active users. Spotify holds a 9% stake in Tencent Music.

Tencent’s entertainment subsidiary reported a profit of $263 million on revenue of $1.3 billion in the first six months of 2018.

“We are pioneering the way people enjoy online music and music-focused social entertainment services,” it said in a filing. It is estimated that the number of people paying for music in China “will more than quadruple between 2017 and 2023.”

The symbol will be TME, but the company has not yet decided on which listing exchange to trade. It can choose either Nasdaq or New York Stock Exchange.

CNN first reported that Tencent Music was considering an IPO in the United States in July.

Tencent Music’s IPO follows big listings by Chinese tech companies in recent months, including smartphone maker Xiaomi and online services provider Meituan Dianping.