China’s NetEase is reviving its Hong Kong music streaming arm IPO
Cloud Village, the music streaming arm of NetEase, runs the NetEase Cloud Music app, which is shown in this photo on a smartphone.
Fan Jianlei | Visual China Group | Getty Images
GUANGZHOU, China – Cloud Village – the music streaming arm of NetEase – is pushing an IPO in Hong Kong after it was allegedly postponed earlier this year.
NetEase originally applied for Cloud Village to be listed in August. Several reports at the time said that NetEase was delaying its IPO due to volatile markets.
However, on Tuesday the company filed a revised prospectus on the Hong Kong Stock Exchange indicating that listing will continue.
There is no price or time of listing yet.
Chinese tech stocks took a hit when Beijing introduced a series of new regulations in areas from privacy to antitrust last year that surprised many investors.
Cloud Village operates NetEase’s music streaming business and the company claims it has 185 million monthly active users.
Revenue for the nine months ended September 30 increased 51.5% year over year to 5.1 billion yuan ($ 799.6 million). Cloud Village’s revenue comes primarily from subscriptions, advertising, and buying virtual items on its platforms.
However, the company is still deeply unprofitable as it focuses on growing user numbers and content while battling tencent’s rival music streaming service.
“Despite a continued increase in its user base, Cloud Village can for the foreseeable future, including the year ending December 31, 2021, due to its continued investments in content, technology, marketing initiatives, and research and development,” the company said in a filing with Hong Kong Stock exchange.
NetEase, the parent company of Cloud Village, is one of China’s gaming giants and has tried to grow internationally through high profile games like “Lord of the Rings” and “Harry Potter” titles.