NetEase Cloud Music priced at HK $ 205, estimated market value of HK 42.6 billion

Wednesday morning, the freemium music streaming platform NetEase Cloud Music was priced at HK $ 205 ($ 26.29) per share, the midpoint of the file’s price range. NetEase Cloud Music is scheduled to be listed on HKEx on December 2 with the stock code “9899”. After this funding, NetEase Cloud Music will raise a total of HK $ 3.28 billion ($ 420.72 million) and have a market value of HK $ 42.59 billion.

People familiar with the matter revealed that NetEase Cloud Music’s international placement went well and was fully subscribed for half a day after the sale began. At the same time, the company attracts many different types of funds, including long-term global funds, investment funds focused on new economy areas, and hedge funds.

According to public information, on May 26 of this year, NetEase Cloud Music submitted its application for registration to HKEx and updated its post-hearing data set on November 16. Later on November 23, NetEase Cloud Music announced the launch of its first audience offering in Hong Kong. The co-sponsors of the listing were BofA Securities, CICC and Credit Suisse.

According to the prospectus, NetEase, Sony Music Entertainment and Orbis will be the main investors, with a total subscription of $ 350 million.

The prospectus also shows that NetEase Cloud Music plans to use the funds raised this time primarily for the music community, enriching diverse music content and improving technical capabilities. The company will also invest in a selection of mergers, acquisitions and strategic investments, operations and general corporate objectives.

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NetEase Cloud Music was launched in 2013 and has now grown into the world’s largest online music community. Its main income comes from online music and social entertainment services. According to the prospectus, NetEase Cloud Music achieved sales of 5.1 billion yuan ($ 801.55 million) in the first three quarters of this year, and its gross profit margin increased significantly, turning positive at 0.4%. The number of monthly active users rose to 184 million, and the number of paid online music users registered on the platform reached 27.52 million, an increase of more than 93.2% year-on-year. The payment rate for online music reaches 14.9%.

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