Tencent Music starts trading in Hong Kong without raising funds

TENCENT Music Entertainment Group began trading in Hong Kong’s exchange on Wednesday (Sep 21) without selling new shares or raising funds.

The stock traded as high as HK$18.04 on Wednesday, having started at HK$18 in the Asian city. That compares to a closing price of US$4.58 (HK$35.95) for the American depository receipts on Tuesday.

The Shenzhen-based company chose to debut in the Asian financial hub by way of introduction, a quicker and easier route for firms already listed elsewhere. The firm controlled by tech giant Tencent Holdings is part of a growing group of Chinese firms choosing the method to list closer to home as escalating Sino-US tensions fuel delisting risks stateside.

Volatile equity markets, high inflation and surging interest rates capped valuations worldwide for companies seeking to go public this year through traditional initial public offerings. As a consequence, there’s been a slump in proceeds raised in venues from New York to London and Hong Kong.

Electric vehicles producer Nio debuted in Hong Kong in March using the same process and later began trading in Singapore via the same method. US-listed platform for housing transactions and services KE Holdings and software as a service firm OneConnect Financial Technology took the same path earlier this year.

Tencent Music raised some US$1.07 billion through a new share sale in New York about 4 years ago, with the shares now trading about two-thirds below their listing price. BLOOMBERG