TikTok Rival’s $5.4 Billion IPO Draws Big Investor Following

Chinese short-video app operator Kuaishou Technology will raise $5.4 billion from its Hong Kong listing, hitting its maximum fundraising target after meeting strong investor demand.

The initial public offering is set to be the world’s largest in more than a year, and will value the company at nearly $61 billion. Kuaishou, which is backed by

Tencent Holdings Ltd.


TCEHY -0.56%

, competes with ByteDance Ltd., the Chinese company behind TikTok and its sister app Douyin.

Both companies have fed growing demand from younger Chinese people to watch and record short videos on their smartphones. Kuaishou’s namesake short-video platform is the world’s second largest, according to data cited in its prospectus, and its services in China had 305 million average daily active users in the nine months ended September.

Kuaishou, or “fast hand” in Chinese, will sell stock at 115 Hong Kong dollars (US$14.80) a share, the top of an earlier range of HK$105 to HK$115, according to a term sheet seen Saturday by The Wall Street Journal. Its shares will start trading Feb. 5.

The IPO helps cement Hong Kong’s standing as a market for big Chinese technology groups. The city in recent years has secured IPOs from companies such as Meituan, a major player in food delivery and travel bookings, and smartphone maker

Xiaomi Corp.

, as well as secondary listings from U.S.-listed businesses such as

Alibaba Group Holding Ltd.

and

JD.com Inc.

Shares in these companies have surged, with Meituan’s stock more than tripling in the past 12 months, and Xiaomi’s more than doubling over the same period. A tech-focused benchmark introduced last summer by Hang Seng Indexes Co., compiler of the city’s widely followed Hang Seng Index, has gained 32% in the six months through Friday’s close.

Kuaishou is also benefiting from broader IPO market exuberance, both in Hong Kong and internationally. After making hot market debuts in Hong Kong last year, Chinese vaping-technology company

Smoore International Holdings Ltd.

, and bottled-water giant

Nongfu Spring Co.

, for example, are both now worth multiples of their valuations at their IPOs.

Units of

Morgan Stanley,

Bank of America Corp.

and

China Renaissance Holdings Ltd.

are acting as joint sponsors for Kuaishou’s IPO. A block of 10 cornerstone investors supported the deal by committing to buy $2.45 billion of shares wherever in the range it priced.

A so-called green-shoe option means underwriters could ultimately increase the deal’s size by 15%, to a final total of $6.2 billion.

Write to Joanne Chiu at [email protected] and Quentin Webb at [email protected]

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