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UPDATED: Kuaishou, the mainland Chinese firm that operates the world’s second most watched short video app, has received approval for its planned public share offering. It is expected to raise at least $5.4 billion and see the start of share trading in early February.

The heavily-loss-making company, in which Tencent has a nearly 22% stake, received the green light for its IPO from Hong Kong Kong’s stock market regulators and published an 861-page updated prospectus. Pre-sale marketing will get under way next week, with the final sale price for the shares expected to be set by Jan, 29 at the latest.

Finance industry publications, citing institutional sources, have indicated that the stock will be sold at a maximum price of HK$105-115 per share, higher than the previously reported HK$93. That could allow it to raise up to $5.4 billion (HK$41.9 billion) of fresh capital. It also points to an initial market capitalization of $55 billion. The figure could go higher still if financial underwriters decide to exercise a greenshoe option and sell more stock.

While Kuaishou’s launch would be the second largest flotation in Hong Kong’s recent history, January has seen money pouring into the city’s stock market in record volumes through the Stock Connect mechanism that allows mainland Chinese investors to buy and sell Hong Kong equities. The huge volume of cash has propelled the Hang Seng stock index to recent highs and lifted tech industry favorites, including Tencent, to all-time record levels.

Kuaishou may also be the first of four Chinese video entertainment firms to seek Hong Kong listings for their stock. Venture capital-backed Bytedance is reported to be pursuing a Hong Kong IPO for Douyin, its mainland Chinese cousin of TikTok. Douyin is a direct rival of Kuaishou and may be twice its size.

Two other Chinese firms with U.S. stock listings – Bilibili and iQIYI – are believed to be looking at secondary share listings in Hong Kong, as Chinese companies come under increasing pressure from U.S. regulators. NASDAQ-traded Bilibili is currently valued at $43.6 billion, while iQIYI has a market capitalization of $16.3 billion.

Kuaishou’s revised draft prospectus shows the company enjoying daily average usage of its app running at over 306 million in November, and MAU exceeding 769 million.

Its problem is turning those vast levels of activity, much of it for its free services, into revenue and profits.

The company said that more than 60% of its turnover comes from the fraction of its business that consists of live streaming of video games. That is a contested and controversial sector in which two other Chinese companies have been accused of major fraud and at which regulators are taking a closer look.

The prospectus acknowledges that Kuaishou must diversify. “We are actively developing additional monetization opportunities to diversify our revenue streams through online games, online knowledge sharing and other products and services,” it says. The company has also indicated that it is looking to move into payment systems – as Douyin is currently doing – through an acquisition, although this too is another sector under scrutiny by mainland regulators.

Kuaishou’s reported net losses last year ballooned to $15 billion (RMB97.4 billion), artificially inflated by the conversion of a massive tranche of preference shares. But at the operating level Kuaishou has also sagged. Operating losses in the nine months to September 2020 weighed in at $1.38 billion (RMB8.94 billion) replacing an operating profit of $255 million (RMB1.66 billion) in the equivalent period in 2019.

Financial news sources suggest that share trading will begin on Feb. 5 2021, ahead of the Lunar New Year holidays.