Tencent Technology Ltd, a Chinese instant messaging provider, is considering joining rivals with an initial public offering on the Nasdaq, rather than on the domestic mainland or Hong Kong stock market.
The Shenzhen, China-based company is owned by the South African-based media group Naspers, which holds a 50% stake, with the other half of the company owned by its founders, a group of Chinese entrepreneurs. There has been speculation an IPO sometime next year could raise anywhere between $100m and $200m, with some analysts predicting the IPO could raise up to $2bn. This would mean a significant return on investment for Nasper’s 50% stake, which it brought for $34m.
By floating on Nasdaq, Tencent would be joining a number of its local rivals, such as Sohu.com Inc, Sina Corp, and NetEase.com Inc. There are also currently a number of non IT-related Chinese companies considering a Nasdaq launch. These include an online travel agent Ctrip.com, which is looking to raise up to $75m, and a Chinese online games group Shanda, which is considering an IPO that could value it at up to $1bn. China’s only privately owned bank is also expected to seek a $1bn IPO in Hong Kong next year.
Tencent is one of China’s biggest instant messaging and mobile services companies, with 233 million registered users and 71 million active users as of mid-November. For the six months to September 2003, it posted operating profit of $21m, on revenue of $36m. It offers an instant messaging platform known as QQ, which allows users to write to each other on computers, mobile phones and pagers.
The company was founded in 1998 and has approximately 600 employees.
This article is based on material originally produced by ComputerWire.