Tencent Music Makes Quiet Start in Hong Kong Stock Trading
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Shares of Tencent Music Entertainment, China’s largest online music company, made a slow but steady start Wednesday in trading on the Hong Kong Stock Exchange.
At the lunchtime trading break, the shares had climbed to HK$18.22, up from their opening at HK$18.00. They are traded under the number 1698.
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The company already has a listing on the New York Stock Exchange and the debut in Hong Kong is by way of an introduction that raises no fresh capital and does not involve the issue of new shares.
The establishment of a secondary listing allows the company to reduce the risk of a delisting by the U.S. authorities or problems from Chinese authorities if they deem the company to be in breach of data security regulations.
Though China and the U.S. in recent weeks have announced an accommodation over the issue of auditing Chinese companies, the two countries appear to have differing interpretations of the agreement. And with the two governments locked in a Cold War there remain multiple other risks to Chinese companies with share listings in the U.S.
The Hong Kong listing also makes Tencent Music’s shares more easily accessible to mainland Chinese investors, most of whom cannot trade the U.S. securities markets.
Majority owned by the giant Tencent games, video and social media group, Tencent Music operates music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. The platforms span online music, online audio, online karaoke, music-centric live streaming and online concert services. “These [enable] music fans to discover, listen, sing, watch, perform and socialize around music,” the company says.
“We will continue to expand the frontier of music entertainment, elevating its role in people’s lives and shaping the future of China’s digital music industry while sharing our success with all of our stakeholders,” said Cussion Pang, Tencent Music’s executive chairman, in a statement after the Hong Kong share listing.
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