Chinese podcast group fails to launch $100mn IPO in blow to Hong Kong


Chinese podcasting platform Ximalaya has suspended plans for a Hong Kong itemizing after its try to lift as much as $100mn was rebuffed by buyers, who stay cautious after Beijing launched a crackdown on international listings by homegrown teams over information safety issues.

Despite its sharply downsized fundraising goal of between $50mn and $100mn, the Spotify-like platform — which is backed by Chinese tech teams Tencent, Xiaomi and Baidu, in addition to Sony Music Entertainment — was undersubscribed, prompting it to carry off on continuing with its preliminary public providing in keeping with bankers and early stage buyers.

Shanghai-based Ximalaya’s retreat was one other indication of how the trail to going public stays bumpy for data-rich Chinese corporations seeking to faucet buyers in Hong Kong and New York, as US authorities step up calls for over audit disclosures and Chinese officers try and reel in abroad listings over cyber safety issues.

“The sentiment was so poor at this point that even Ximalaya failed to get enough investors on board,” stated a Hong Kong-based IPO banker, including that the audio service, valued at Rmb27bn ($4bn) in its final funding spherical, was beforehand comparatively favoured amongst its friends.

Ximalaya had initially shelved plans to record within the US after China’s prime web watchdog, the Cyberspace Administration of China steered holding off, in keeping with a state-run investor within the firm. That deal reportedly aimed to lift about $500mn.

The investor added the corporate had obtained the blessing of each the CAC and China’s securities regulator for a Hong Kong IPO, despite the fact that information safety guidelines for an offshore listings regime are but to be finalised.

The firm’s newest setback comes throughout a dire 12 months for share gross sales in Hong Kong. New listings within the metropolis have raised simply $2.4bn within the 12 months so far, in keeping with information from Dealogic, reflecting a 94 per cent fall in contrast with the identical interval a 12 months in the past.

The excessive finish of Ximalaya’s fundraising goal, whereas modest by historic requirements, was nonetheless properly above the norm for 2022. The 19 corporations dropped at market in Hong Kong this 12 months have raised simply $94mn on common.

A unique, early-stage investor in Ximalaya stated the corporate’s revived share sale had been pushed ahead regardless of “substandard market conditions” partly on account of exit demand from a few of its personal fairness backers. Ximalaya can be beneath stress to not value shares decrease than the extent at which state backers purchased in, the investor added.

It has been reported that the corporate was in discussions with a Shanghai authorities physique that might take a particular administration stake, often called “golden shares”. Such shares, which offer authorities our bodies with veto energy over main selections together with going public, are certainly one of many new practices regulators have established in recent times to inject higher affect over personal corporations that course of a considerable amount of information.

Another of the handful of Chinese corporations in search of to check international investor urge for food is Noah Holdings, a Sequoia-backed supplier of personal wealth administration merchandise. The agency is holding reverse roadshow conferences this week for a deliberate Hong Kong itemizing, in keeping with an individual acquainted with the matter.

Ximalaya, CAC and the China Securities Regulatory Commission didn’t instantly reply to requests for remark.