Kuaishou IPO reflects the war of video networks like TikTok

0
1605
Kuaishou IPO reflects the war of video networks like TikTok
Kuaishou Ipo Reflects The War Of Video Networks Like Tiktok

Kuaishou Technology, whose name translates to “quick hands,” has submitted its prospectus for listing in Hong Kong, with a possible valuation of € 42 billion. Intensifying competition between social video networks led to net losses in the first half, a preview of what may be to come.

The Tencent-backed firm is best known for its Kuaishou Flagship and Kuaishou Express apps, which are very popular in rural and less developed regions of China. In January-June, a whopping 302 million viewers spent an average of 85 minutes a day watching viral home videos of all kinds, from boozy bragging to pig farming tutorials.

More than two-thirds of the revenue comes from the sales of virtual gifts from fans to their favorite presenters. They rose 17% compared to the first half of 2019, reaching 2,200 million euros. ByteDance, better known for TikTok, has quickly become a serious rival. Douyin, the Chinese version of TikTok preferred by urbanites, already has more monthly active users than Kuaishou, according to local firm QuestMobile.

Kuaishou, who was born nine years ago, is on the defensive. It spent 1.7 billion euros on promotions and advertising between January and June, more than four times the amount a year earlier. That led to an adjusted net loss of 800 million in the period. With a valuation of 42,000 million, it would be trading at more than 8 times the income of 2019.

To make matters worse, overall industry growth is slowing. After more than doubling annually from 2015 to 2019, sales of virtual gifts from live streaming are projected to rise just 20% in the next few years. Kuaishou, at least, is veering into advertising and video games. Having Tencent as a shareholder could help you. Although the prospectus provides a clearer picture of the firm, it is not clear that investors are going to like what they see.

SEE ALSO  How to download TikTok videos on Android, with and without watermark

>