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Why does Tencent Music choose to introduce the form to go public?

via:新浪科技     time:2022/9/17 6:03:26     readed:153

Tencent Music returns to Hong Kong to go public, the core reason is the environment. The middle level of a number of newly listed film and television companies admits that it is the biggest victory to be able to go public in such a situation.

Another Chinese stock market returns.

On September 15, Tencent Music announced that it had been approved by the second listing of the main board of the Hong Kong Stock Exchange and released related listing documents. This time, Tencent Music is introduced by way of int all of new shares and fundraising. It is planned to start trading on September 21, 2022, with the stock code "1698".

It is worth noting that in the first half of this year, Chinese companies such as shells and Weilai Automobile also adopted the listing method to log in to Hong Kong stocks.

According to the calculation of Huatai Securities, as of August 27, there were 35 Chinese stocks that meet the second listing conditions of Hong Kong stocks, with a total market value of about 1.18 trillion Hong Kong dollars.

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Tencent Music returns to Hong Kong to go public, the core reason is the environment.

Since the beginning of 2022, the number of Chinese companies listed in the United States has dropped sharply. In addition to the impact of the epidemic, the recurrence of the conflict between China and the United States in terms of the regulatory system of China and the United States is the main cause.

At the end of 2021, the SEC (US Securities Regulatory Commission) issued the "Foreign Company's Accountability Law" and issued the "Accountability Law of the Foreign Companies" identification report ".

Since March 2022, about 150 Chinese stock companies have been included in the "pre -delisting list", and the market has gradually strengthened the expectations of regulatory tightening and acceleration. On August 26, the Securities Regulatory Commission, the Ministry of Finance, and PCAOB (the Accounting Supervision Committee of the US Public Corporation) signed a supervision cooperation agreement, and the market was concerned that the margins were eased.

The above -mentioned cooperation agreements have made clear agreement on supervision, supervision and investigation activities on the cooperation between relevant accounting affairs in accordance with the principle of compliance and mutual benefit, and form a cooperation framework that meets the regulations and regulatory requirements of both parties. The cooperation agreement alleviates the market's concerns about the extreme situation of China stock market delisting, and also lays the foundation for the reciprocal regulatory cooperation between China and the United States to carry out audit supervision and cooperation.

However, this move is only the first step in the subsequent series of cooperation measures. The specific implementation situation still needs to be further judged after the PCAOB is officially reviewed.

Tencent Music stated in the listing documents that if PCAOB cannot review or fully investigate the auditors in China, its deposit shares in the United States may be delisted, and its deposit shares in the United States may be banned from trading on the market.

"The" Accelerating the Accountability Act of Foreign Companies "that may be promulgated will reduce the number of years of non -review year from three years to two years, so our US deposit shares are prohibited from being prohibited from overseas transactions or the term before delisting. The bill is passed, and our US deposit shares may be delisted from the exchange in 2023 and are banned from trading on the United States. "Tencent Music said.

If you return the market to come true and not landed in Hong Kong stocks, Tencent Music will face huge cash pressure.

As a result, Tencent Music must go to Hong Kong for the second time.

It has many considerations for the introduction of the introduction form. Introducing listing is a way to list the second time. This time, Tencent Music has logged in to Hong Kong stocks by introducing listing. It does not need to issue new shares or sell the shares held by the existing shareholders at the time of listing, which does not involve IPO financing links.

It is close to Tencent's person that Tencent Music has remained stable in terms of capital reserves and cash flow. This time, by introducing listing and landing in Hong Kong stocks, it can not only provide investors with more transaction location selection and more flexible trading time, nor dilute dilution. The interests of existing shareholders are conducive to introducing more investors, which is more beneficial to its long -term development.

 Difficult growth

But on the other hand, the problem of fundraising under the sluggish market is also a cause.

On September 2nd, Lehua Entertainment announced the suspension of the Hong Kong stock IPO plan, and the important factor was that the valuation was too low.

Including capital markets, industry executives, etc., upstream and downstream people have emotiated to the 21st Century Business Herald. Based on multiple factors such as supervision and market, entertainment companies are more attractive to capital, especially in Hong Kong stocks.

The middle level of many listed film and television companies frankly said that in this way, it is the biggest victory to be able to go public. "In the current market, it can be at least one for a period of life." There is a middle level.

There are major environmental factors behind it, and there are also problems in the entertainment industry itself. Specific to Tencent Music, it is facing consideration of growth factors.

The listing documents show that in the second quarter of this year, Tencent Music Online Music Service Mobile Duan Monthly decreased by 4.8% year -on -year to 593 million, and the monthly activities of social entertainment mobile terminals fell 20.6% year -on -year to 166 million.

In this regard, the company explained that as far as online music services are concerned, the monthly work in the second quarter has decreased year -on -year, mainly due to the decrease in marketing expenditure. As far as social entertainment services are concerned, month -on -year decline is mainly due to increasing market competition.

In fact, the social entertainment business of Tencent Music Cash Cow is mainly based on live broadcasting and other business models. The sector encountered a strong expansion of policy restrictions and Douyin. "The high consumption is significantly less." The founder of the head live broadcast platform told the 21st Century Business Herald reporter.

Affected by this, in the second quarter, Tencent's total revenue decreased by 13.8%from 8 billion yuan in the same period in 2021 to 6.9 billion yuan.

Among them, online music service revenue decreased by 2.4%to 2.9 billion yuan in the same period in 2021. Specifically, due to the increase of paid users by 24.9%, music subscription revenue was 2.1 billion yuan, an increase of 17.6%year -on -year. However, due to the impact of industry adjustments on opening advertising and epidemic, Tencent Music advertising revenue has declined year -on -year. Due to the re -signing agreement with several music copyright parties, the transfer of authorization revenue has also declined year -on -year.

At the same time, Tencent Music Social Entertainment Services and other service revenue decreased by 20.4%in the second quarter of 2021 to 4 billion yuan in the same period of 2022.

In the current period, Tencent Music gross profit was 1.1 billion yuan, a year -on -year decrease of 15.3%. The gross profit margin dropped slightly by 0.5%to 29.9%from 30.4%.

Given that the company is also controlling the cost, in the end, in the second quarter, the profit during the Tencent music period was 892 million yuan, and it was 871 million yuan in the same period last year.

Objectively, this is a general problem in the industry. A head music company executives admitted to the 21st Century Business Herald reporter that there is no platform incrementing at present, and the next step of the music industry cannot be seen.

Of course, there is no need to be overly pessimistic. Tencent Music is trying.

For example, recently, it launched the "one -click new song to overseas" function to help musicians distribute their music works to more than 150 music streaming platforms worldwide. As of the end of the second quarter, the service had brought more than 10,000 musicians from overseas fans.

In the second quarter, TME LIVE held Wang Yuan's online concert, and launched the "Leslie Cheung Passionate Concert Super Clear Repair Edition in 2000" and Jay Chou's "The Strongest Magic Demon" based on AI enhanced technical support. These two re -screening concerts have obtained more than 100 million independent visitors in the Tencent ecology, and the cumulative reading volume of topics on the entire network has reached 6 billion times.

As of September 15, Eastern Time, Tencent Music closed at $ 4.83/share, an increase of 1.05%, with a market value of about 8.2 billion US dollars. When it was listed in the United States in 2018, the issue price of Tencent Music was $ 13.

(Author: He Hongyuan Editor: Lin Xi)

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