China's Tencent Music jumps on US launch

Tencent executives celebrate the firm's listing on the New York Stock Exchange

Shares in Tencent Music Entertainment Group, China's music streaming giant, jumped almost 10% on their first day of public trade in New York.

The listing raised about $1.1bn (£870m), based on an initial offering price of $13.

Shares ended the day about 8% higher at $14, giving the firm a market value of almost $23bn - comparable to Spotify.

The launch had been clouded by the recent downturn in US financial markets and tensions between the US and China.

Tencent Music, part of the sprawling Chinese tech company Tencent Holdings, owns some of the most popular music apps in China, including QQ Music, Kugou Music as well as the karaoke service WeSing.

It claims about 800 million monthly active users, of which about 35 million were paying customers at the end of September.

Tencent executives had reportedly expected a valuation as high as $30bn when the firm started to pursue the New York Stock Exchange listing earlier this year.

But after weeks of delay, the firm narrowed the selling price for about 82 million shares to $13 to $15, with the offering ultimately settling at the lower end of that range.

Tencent, which is incorporated in the Cayman Islands, said it plans to use the money to expand its music catalogue, develop new services, market the company and finance potential investments.

The firm is backed by investors that include Spotify, Sony Music Entertainment and Warner Music Group and is majority-owned by Tencent Holdings.

Tencent Holdings, which includes advertising, digital payments, online games, cloud services and the WeChat messenger service, was founded in 1998 and has been listed on the Hong Kong Stock Exchange since 2004.

It created Tencent Music Entertainment Group after acquiring China Music Corporation in 2016 and merging it with its existing music business.