According to the Financial Times, TikTok owner ByteDance Ltd. is resuming plans to list in Hong Kong by early next year, despite Chinese authorities tightening their grip on the country’s technological businesses.
When will the listing happen?
According to the publication, the listing may happen next quarter or in early 2022, citing three anonymous sources with knowledge of the preparations.
According to the Financial Times, the firm has declined to respond. Separately, China’s 21st Century Business Herald said on Sunday that ByteDance has refuted the report of a resurrected Hong Kong IPO, calling it “untrue.” On Sunday, the firm did not reply to emails requesting comments.
Data Security Concerns
According to the Financial Times, ByteDance has been trying to resolve data security concerns highlighted by Chinese officials. One of the persons quoted said that ByteDance is going through a review process and has filed files to Chinese authorities, and that final guidance is expected from ByteDance by September. ByteDance put its plans to list offshore earlier this year on hold indefinitely, according to Dow Jones, after government authorities advised it to focus on addressing data-security issues.
The Financial Times’ story of a resurrected ByteDance IPO comes at a difficult moment for Chinese IT companies. Last month, President Xi Jinping announced broad regulatory measures aimed at the $100 billion education technology sector, sparking a selloff that saw Chinese equities lose $1.5 trillion at one point.
Beijing proposed new regulations demanding a cybersecurity examination for virtually all businesses wanting to list overseas, which resulted in heightened state control of one part of China’s huge tech sector. Following the contentious $4.4 billion IPO of ride-hailing giant DiDi Global Inc. in July, the Chinese government has essentially halted international listings to protect data security.
Officials also surprised investors with new rules requiring internet food delivery companies to pay at least the local minimum wage.
The increased scrutiny of Chinese technology businesses has sparked concern about what may be next on Xi’s hit list. Tencent Holdings Ltd., China’s most valuable company, led a stock sell-off last week after Chinese official media denounced online gaming as “spiritual heroin.”
After China placed extensive rules on the private tutoring industry, ByteDance informed workers last Thursday that it planned to fire off teachers, sales, and advertising personnel in its education division, according to two people.
According to one of the individuals and a third source, ByteDance would also close its curriculum-focused preschool and k12 tutoring operations in China to comply with the laws.
