美股IPO雷达

joined discussion · ·

Unicorn Encyclopedia | About to land on the Hong Kong Stock Exchange? Can ByteDance, a giant worth 400 billion US dollars, fulfill its valuation potential?

Hot discussion about listing

On the 25th of last month, ByteDance CEO Zhang Yiming announced in an internal communication that Julie Gao, a senior partner at Sidley Austin LLP, will join ByteDance as CFO.

It is reported that Julie Gao has provided legal services for more than 100 companies' listings and other capital market financing projects, including Meituan, JD.com, PDD Holdings, Xiaomi, and more.

Industry insiders evaluate her as follows: "Played a deep part in the half of China's Internet companies listing in the US, knowing each other.”

According to the website of the Hong Kong Companies Registry, "ByteDance (Hong Kong) Limited" has been renamed "TikTok Group (Hong Kong) Limited", effective from May 6, 2022. This is exactly 10 years after the company was established on May 8, 2012.

At the same time, according to Tianyancha information, "Beijing ByteDance Technology Co., Ltd." has been renamed "Beijing TikTok Information Service Co., Ltd." on May 7; "ByteDance Co., Ltd." has been renamed "TikTok Co., Ltd." Several other companies under ByteDance have also been renamed to "TikTok".

As a harbinger of independent listing, the renaming and appointment of a new CFO has sparked discussions among the curious public.

Historical rumors

ByteDance, the world's highest-valued unicorn, has always been the focus of attention with every move, even considered as a kind of indicator. Its listing process has become a mysterious topic that attracts a lot of attention.

Since 2018, rumors about ByteDance's IPO have been constantly emerging.At first, everyone was discussing whether ByteDance would go public on the Hong Kong Stock Exchange or the U.S. stock market. Later, the China Securities Regulatory Commission (CSRC) believed that more A-share unicorns should be retained, so the fate of ByteDance seemed to have changed, and it became possible for ByteDance to go public on the A-share market.

In February 2019, insiders said that ByteDance might list on the Shanghai Stock Exchange's Science and Technology Innovation Board (STAR Market), and relevant departments had contacted the company in the hope that it would go public on the STAR Market. However, ByteDance quickly denied this news.

In October 2020, there was news that ByteDance was considering spinning off its TikTok business for a separate IPO, which could be completed as early as the first half of 2021.

In addition, there are also reports that ByteDance intends to split TikTok for an IPO, potentially launching it before September 2021. These timelines have now been proven false, but no one can guarantee that it is not a postponement.

When Zhang Yiming took office in March 2021, public speculation about the IPO reached its peak. In April of the same year, ByteDance publicly announced:There have been many recent news about companies going public. After careful research, it is believed that the company does not currently meet the conditions for going public and has no plans for an IPO at the moment.。

In October last year, there was news that ByteDance's IPO might be postponed until the end of 2022, accompanied by the latest valuation of ByteDance - over $400 billion.

Now, the news of ByteDance's IPO has resurfaced. How do mooers view it?

Overall market environment

The current unfavorable market environment is a major obstacle facing ByteDance.

After experiencing a significant decline in March this year, the Chinese internet sector has not fully recovered until now.

Since the beginning of this year, there have been 100 Chinese stocks listed in the US with a decline of over 50%. The technology and internet sectors in the Hong Kong stock market are among the hardest hit areas. Several technology/internet giants, who are at the top of the food chain, are also struggling in the stock market.$TENCENT (00700.HK)$、$Alibaba (BABA.US)$ 、$MEITUAN-W (03690.HK)$、$JD.com (JD.US)$ and$PDD Holdings (PDD.US)$— are also struggling in the stock market.

Among them, there is a high overlap in business models with Today's Headlines.$Qutoutiao (QTT.US)$Currently, the stock price is less than $1, with a decline of 67% this year, and the market cap is only $28 million; a competitor of Watermelon Video.$Bilibili (BILI.US)$With a decline of 59% this year, the current market cap has shrunk by nearly 80% from its peak of $40 billion.

As for Douyin's old rival,$KUAISHOU-W (01024.HK)$the situation is equally unfavorable. Since its first breaking on July 26th last year, Kuaishou's stock price and market cap have been in a volatile downtrend, until now. After the round of plummeting in March, Kuaishou's market cap evaporated nearly HKD 900 billion from its peak, and the dynamic PE has dropped to -2.6.

Looking at the global stock market, the market performance of technology internet companies and unicorns is also deteriorating.

Those who consider TikTok as a thorn in the eye,$Meta Platforms (META.US)$ the market cap dropped below $600 billion at the beginning of the year.$Netflix (NFLX.US)$ and$Amazon (AMZN.US)$The first-quarter financial report also successively 'bombed'. Dubbed as the 'Southeast Asian Tencent' compared with ByteDance by major investment banks over the past two years.$Sea (SE.US)$with the stock price dropping from a peak of $367 to $64, once as high as $200 billion and now only $36.1 billion left, shrinking by nearly 80%.

In the current market environment, what level can ByteDance's valuation reach after going public? Can the highest valuation be realized? Everything is unknown. Unicorn Encyclopedia, direct access to wealth; listen to my eloquence, enjoy and sing along: next, let me take you into the story of ByteDance.

Founding Process

In 1983, Zhang Yiming was born in Longyan, Fujian. He has been passionate about computers since high school. In 2001, he entered Nankai University and majored in microelectronics and software engineering. The current CEO of ByteDance, Liang Rubo, is his close friend from university.

After graduating from university in 2005, he and his team developed collaborative office software, which led him to experience his first entrepreneurial failure. Following a brief and unsuccessful entrepreneurial venture, Zhang Yiming joined the travel search website Kuxun in February 2006 and left in 2008.$Microsoft (MSFT.US)$ 。

In October 2009, Zhang Yiming started his first independent business and founded the vertical property search engine '99fang'. He resigned as CEO at the end of 2011.

For a long time, Zhang Yiming has believed thatWhen users open a mobile application, they should see interesting information instead of fixed information curated by editors.However, at that time, there was no successful case of 'personalized recommendations' as a complete product in China's research.

In 2012, ByteDance was born. 'Funny pictures' and 'humorous jokes' achieved great success in the Apple App Store, ranking among the top 20 for a long time and accumulating hundreds of thousands of daily active users. In August of the same year, Toutiao was launched.

In September 2016, ByteDance launched Douyin, initiating the era of short videos.

To this day, ByteDance has a global active user base of 1.9 billion.

Company Operations

After the rename, "Douyin Limited" has 16 wholly-owned subsidiary companies, from which we can see its business map:Game development and publishing Chaoxi Guangnian, enterprise-level technology service cloud platform Volcano Engine, office software Feishu, knowledge service field subsidiary Quantum Leap, and healthcare field Xiaohe Health.等。

Market views believe that compared to the separation and listing of the video business at the end of 2021, ByteDance may package all businesses except TikTok for listing on the Hong Kong Stock Exchange.

In the just passed 2021, in response to multiple challenges such as regulatory environment, growth bottleneck, and business expansion,ByteDance made drastic adjustments from personnel to organizational structure: education, securities, gaming, music, commercialization and other businesses underwent contraction, strengthened personnel optimization, and abolished the nine-year alternating work schedule.Weekly and bi-weekly work schedule.

In November 2021,ByteDance announced its latest six BUs: Douyin, Dali Education, Feishu, Volcano Engine, Day X light year, and TikTok.The above organizational adjustments have not changed the previous business architecture, but have given each business greater autonomy and flexibility, striving to reduce the past nine years of expansion disorder.

Now, it seems that perhaps when the business segments were adjusted before, ByteDance was already preparing for its subsequent IPO plans.

Company valuation

Since its establishment in 2012, ByteDance has undergone dozens of financing rounds, with the top five shareholders being$Sequoia Capital Holdings (LIST2559.US)$、$Morgan Stanley (MS.US)$、$Goldman Sachs (GS.US)$、$Tiger Global Holdings (LIST2121.US)$、$Softbank Holdings (LIST2558.US)$ 。

Initially, some media were not optimistic about the development of ByteDance.

In 2014, when ByteDance completed a $0.1 billion Series C financing led by Sequoia Capital and followed by Weibo, the media released an article titled "Today's Headlines: How do you value a content app at $500 million?"Why is the content app Toutiao valued at $0.5 billion?for topic released an article, triggered a heated discussion.

During these eight years, the valuation of ByteDance has skyrocketed from around $0.5 billion to approximately $400 billion, an increase of 800 times.

According to insiders, ByteDance's valuation in the secondary market is fluctuating between $360 billion and $450 billion this year.

On April 16th, several current employees of ByteDance confirmed that the company has initiated options buyback this year, with a price of $142 per share, a 7.5% increase compared to last year's $132 per share.

Financial Situation

ByteDance has not publicly disclosed all of its financial information, adding to its sense of mystery.

According to the financial data disclosed by ByteDance, its actual revenue in 2020 was approximately RMB 236.6 billion (about $34.4 billion at the time exchange rates), with a year-on-year growth of 69%. Gross profit increased by 93% to 133 billion, and the operating loss was 14.7 billion.

ByteDance's revenue is approximately equal toTencentHalf of it, 4 times that ofKuaishou, which started warming up from October 16, double that of$Baidu (BIDU.US)$AndMeituan。

Data shows that ByteDance's total revenue in 2021 is about 390 billion RMB (58 billion USD), a year-on-year growth of 70%. Among them, more than 70% of the revenue comes from the Douyin business unit, with Douyin, TouTiao, and XiGua Video, the three flagship products, respectively generating 150 billion, 45 billion, and 8 billion dollars in revenue.

What do the mooers think about ByteDance's products? Do you have a bullish outlook on ByteDance's IPO prospects? Welcome to discuss below.

$ByteDance (FT0001)$

Editor / bravo

400K Views