ByteDance angling for HK listing of China operation

Business | 31 Jul 2020 3:04 pm

China's ByteDance is considering listing its domestic business in Hong Kong or Shanghai, people familiar with the matter told Reuters, against a backdrop of rising Sino-U.S. tensions over its hit non-China video app TikTok.
Of the two venues, the company prefers Hong Kong, according to two of the people. One of the two also said ByteDance is simultaneously studying the option to list its smaller, non-China business - which includes TikTok that is not available in China - in Europe or the United States.
The eight-year-old Beijing-based tech and media company had originally wanted to list as a combined entity, including TikTok and other operations, in New York or Hong Kong in a blockbuster deal. TikTok allows smartphone users to film and upload short
videos with special effects within seconds.
But ByteDance has been in talks with bourse operator Hong Kong Exchanges and Clearing (HKEX) over the China business listing, one of the people said. The company was also discussing
it with Chinese securities regulators, according to the other two people.
Reuters previously reported China accounts for the bulk of ByteDance revenue, which one source said was around US$16 billion in 2019.
A standalone listing could value the China business at more than US$100 billion in Hong Kong or on Shanghai's Nasdaq-style STAR Market, according to two sources.
The review of separate plans for the China business comes amid growing concerns over U.S. regulatory scrutiny and uncertainty over whether a 2013 audit deal between Beijing and Washington, that underpins Chinese firms listing in the United
States, will remain intact.
The people interviewed by Reuters said the idea of splitting the whole business into two public listings and the venue discussions are preliminary and subject to change. 
Plans may also be complicated by some heavyweight ByteDance investors looking to take over TikTok at a valuation of US$50
billion. TikTok faces pressure from U.S. regulators who have spoken about banning the app, or requiring ByteDance to sell it, over suspicions Beijing could force its owner to turn over data on U.S. users.

ByteDance declined to comment. HKEX said it doesn't comment on individual companies. The China Securities Regulatory Commission didn't respond to a request to comment.


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