Chinese online giant Tencent seeks spinoff for mega-hit messaging service
WeChat is a phenomenally successful voice and video messaging service that was launched only two and a half years ago. It now claims over 400 million users, including 70 million outside China, mostly within other parts of Asia.
According to sources quoted by the China Daily newspaper, Tencent is now looking to list the unit on the Singapore stock exchange via an initial public offering.
Tencent itself is listed on the Hong Kong Stock Exchange and has a current market capitalization of US$88 billion (HK$685 billion). Apparently the company decided that it would be too complicated to list a tracking stock on the same market and opted for a Singapore listing instead of a Hong Kong one for WeChat. Tencent has now opened an office in the city state to handle the flotation, according to China Daily.
WeChat, which is available on all major mobile platforms, is not believed to be profitable at present. But as it expands functionality it is expected to introduce paid for and premium versions of its services. Last month WeChat introduced its first game, reportedly downloaded 80 million times within a day.
Tencent recently reported first quarter profits of $660 million (RMB4.04 billion) for the three months to June.