Tencent Music's IPO: What You Need To Know

The Chinese music streaming company Tencent Music Entertainment Group TME began trading on the New York Stock Exchange Wednesday.

The Details

Tencent has become the largest online music entertainment platform in China. The service caters to over 800 million monthly active users averaging over 70 minutes per day, according to the company's F-1 filing with the Securities and Exchange Commission. 

Total revenue for the first half of 2018 totaled $8.6 billion, translating to year-over-year growth of 92.2 percent. This gain is largely driven by the increase in both international and domestic music labels, of which there are now more than 200. 

The company offered 82 million shares at the price of $13. By the end of its Wednesday debut, the stock closed up 9.2 percent at $14.19 per share. The company reported an implied valuation of $21.3 billion following the IPO.

Some of Tencent’s main underwriters include Bank of America Merrill Lynch, Deutsche Bank Securities and Goldman Sachs.

The Service

Tencent brands on offering an all-in-one music entertainment destination, providing a fun and engaging user experience, according to the filing. The platform combines music streaming with a social media element that allows users to engage with music in several ways, such as by commenting, sharing, liking and virtual gifting.

The platform’s ecosystem includes online karaoke, online music, live streaming and overall social interaction. Tencent primarily markets to listeners in China, a market with substantial, growing demand for music entertainment.

“We are pioneering the way people enjoy online music and music-centric social entertainment services. We have demonstrated that users will pay for personalized, engaging and interactive music experiences. Just as we value our users, we also respect those who create music. This is why we champion copyright protection — because unless content creators are rewarded for their creative work, there won’t be a sustainable music entertainment industry in the long run,” Tencent said in its F-1 filing.

Tencent Music shares were trading up 2.5 percent at $14.35 at the time of publication Thursday.

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