CLOUD Village Inc., the music streaming arm of Chinese gaming giant NetEase Inc., has won approval from the Hong Kong stock exchange for an initial public offering (IPO), according to people familiar with the matter. The unit plans to start gauging investor demand for its offering as soon as this week, the people said. An IPO could raise about US$1 billion. Cloud Village’s IPO will be the first sizeable deal in Hong Kong since electric vehicle maker XPeng Inc. raised US$2 billion in a dual primary listing in June. Since then, activity has gone quiet as sentiment has been impacted by China’s regulatory moves toward overseas listings. Cloud Village runs NetEase’s music streaming platform in China and generates most of its revenue through subscriptions, virtual gifting and advertising. NetEase has long been a distant runner-up to Tencent Holdings Ltd. in gaming and music streaming. Started in 2013, the music wing has since expanded its products to offer everything from online karaoke to live-streaming and lyrics sharing. The unit, 62 percent owned by NetEase, grew its monthly music users to 181 million last year, of which 9 percent are paying subscribers, according to its preliminary prospectus. Unlike its much larger rival, Tencent Music Entertainment Group, NetEase’s music arm is still in the red largely because of high content costs, almost as big as its 2020 sales. (SD-Agencies) |