weekly
Written by: Chen Fanganzhen
2020-08-10 13:57
Last update date: 2020-08-10 13:57On the evening of last Thursday (August 6th), US President Trump suddenly announced the signing of two executive orders that would block WeChat and TikTok, two applications developed by Chinese companies in 45 days. On the same day, U.S. Securities and Exchange Commission (SEC) and Treasury Department officials stated that they had urged the president to sign an order to delist companies that were listed on U.S. exchanges before January 2022 but did not meet U.S. audit requirements. Under Trump's vigorous promotion, an "iron curtain" against Chinese companies is slowly falling. The first to bear the brunt is TikTok and its parent company Bytedance, which was forced to give up its US business under pressure from the US government.
The sale of the US business undoubtedly brought a heavy blow to Bytedance's listing plan. ByteDance was established in 2012, plus the latest Tiger Global Management (Tiger Global Management), the company's valuation reached 100 billion US dollars. ByteDance has obtained eight rounds of financing in the eight years since its establishment. No matter in terms of scale, market share or company development prospects, it has reached the threshold of its upcoming listing.
The sale of the US business undoubtedly brought a heavy blow to Bytedance's listing plan. (Reuters)
Eight rounds of financing and listing are poor
ByteDance's products and services have covered 150 countries and regions in 75 languages around the world, and its applications are at the forefront of the overall list in application stores in more than 40 countries and regions. The core revenue of ByteDance comes from advertising. According to the calculation of Guohai Securities, the operating income of ByteDance in 2020 will reach 200 billion yuan. According to data, TikTok's revenue in 2019 was US$176.9 million, a five-fold increase from the same period last year. In 2020, the US market alone is expected to have US$500 million in revenue. More importantly, TikTok has become a key part of Bytedance's connection to overseas markets and global business deployment. With TikTok's global traffic pool, the growth space of Bytedance will be more imaginative.
At present, TikTok has formed a scale in overseas markets. According to data published by Sensor Tower, a market research organization, TikTok received more than 87 million downloads in June, a 52.7% year-on-year increase. Users spent a total of US$90.7 million, of which about 11% came from overseas markets, becoming a global non-game category in June. Double champions in application downloads and operating income.
Zhang Yiming, the founder of ByteDance. (Profile picture/Visual China)
In fact, due to political pressure, the possibility of ByteDance going public in the United States has become smaller and smaller, and both A-shares and Hong Kong stocks have extended an olive branch to Zhang Yiming. As early as the Shanghai Stock Exchange’s Science and Technology Innovation Board system was launched, the mainland regulators used "Today’s Toutiao" (Bytedance’s largest subsidiary in China) as an example, stating that it is not a hard technology company in the traditional sense. , But it also has a high technological content. It is a smart company with strong technological innovation capabilities. It also meets the requirements of the Securities Regulatory Commission to support the new generation of information technology, high-end equipment, new materials, new energy, energy saving and environmental protection, and biomedicine. High-tech industries and strategic emerging industries. As an Internet "unicorn" with extremely high valuations, Bytedance is a star company that A-shares want to keep.
The above is excerpted from the 226th "Hong Kong 01" Weekly Report (August 10, 2020) "The Iron Curtain of Science and Technology Quietly Falling Down. Are China's stocks ready to return to the Hong Kong Stock Exchange? ". If you want to read the full text, please click here to subscribe to the weekly newsletter and browse more in-depth reports.
More weekly articles:【01 Weekly Special Page】
"Hong Kong 01" Weekly, available at major newsstands, OK convenience stores and Vango convenience stores.
Selected content of 226 issue of "01 Weekly":
[Cover Story] The White House bans TikTok, WeChat, and the Sino-US game provokes a huge Internet wave
[In-depth analysis] Pros and cons of the "vacuum period" plan of the Legislative Council
Dialogue with Frederick Fung——The Enlightenment of the 97 Provisional Legislature to the Pan People
If Situ Hua was alive, would the resistance be led by the "total resignation"?
[Technology. The future] curb the anti-monopoly offensive and defensive wars of the tech giants
BNO
TikTok bans TikTok Bytedance, China's A-share Unicorn 01 Weekly Report Hong Kong Economic and Hong Kong Stock Exchange
