Tencent unit plans IPO

Business | Janice Huang 10 Oct 2017

China Literature, a unit of internet giant Tencent Holdings (0700), is reportedly seeking the approval this week of the local bourse for an initial public offering in the SAR.

If it gets the green light, the firm, also known as Yuewen Group, and China's largest online publisher and e-book company, will arrange pre-marketing of its IPO next week.

Tencent said last Friday that its shareholders can enjoy privileged subscription to China Literature shares and they have until October 20 to register their subscription applications.

China Literature wants to raise up to US$800 million (HK$6.24 billion) from its planned public offering. Tencent currently holds indirectly 65.38 percent of Shanghai-based China Literature.

Often compared to Amazon and its Kindle service, China Literature provides content to mobile devices and PCs. As of the end of last year, China Literature had 5.3 million writers and 8.4 million literary works. If China Literature's Hong Kong IPO plan materializes, it intends to use the IPO net proceeds to expand its online reading business, specifically its share in the mobile reading market, and step up its sales and marketing activities.

Meanwhile, mainland coke producer Henan Jinma Energy Company said the retail tranche of its IPO has been oversubscribed about 42 times. It priced its IPO at HK$3 per share and it raised HK$353 million net from its public offering.

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