Tencent Music Entertainment Group, the online-music arm of China’s largest social-media company, filed for a U.S. initial public offering.
The music-streaming site listed its offering size as $1 billion in a filing Tuesday with the U.S. Securities and Exchange Commission. The amount is likely a placeholder and may change.
Tencent Music is preparing to sell shares after its parent company reported its first profit drop in at least a decade and grapples with restrictions on game approvals in China. China Literature Ltd., the e-book business spun off from Tencent Holdings Ltd. in November, has fallen 43 percent in Hong Kong trading this year.
For the first six months of 2018, the company revealed a profit of $263 million on total revenue of $1.3 billion. For the 2017 fiscal year profit was 1.3 billion yuan ($199 million) on revenue of almost 11 billion yuan, compared to 85 million yuan on sales of 4.3 billion yuan a year earlier.
Tencent Music’s platforms are becoming important vehicles for U.S. pop stars such as Katy Perry and Rihanna to reach a Chinese audience, alongside homegrown artists like Jason Zhang and Joker Xue. The company counts Stockholm-based Spotify Technology SA as an investor, but the two companies may increasingly become rivals in regions such as Southeast Asia.
Bank of America Corp., Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co. and Morgan Stanley are arranging the share sale.
© Copyright 2023 Bloomberg News. All rights reserved.