China’s answer to Kindle soars on Hong Kong market debut

Shares in Chinese internet giant Tencent’s e-book arm, China Literature, surged more than 60 percent on their debut on the Hong Kong stock exchange Wednesday, after raising US $1.1 billion in an IPO.

Shares in China Literature, the country’s biggest online publishing business and Tencent’s answer to Amazon’s Kindle Store, opened at HK $90 ($11.53), which is 63.6 percent more than its HK $55 IPO price, and shot up a further 14.3 percent to HK $102.9 in a little over an hour of trading.

The company calls itself a “pioneer” of China’s online literature market, carrying 6.4 million writers and 9.6 million literary works.

Analyst Dickie Wong told AFP that investors saw a lot of potential in China Literature and its prospects for growth.

“I do see some of the authors, they can be very famous and some of their stories can become movies or soap operas and online games and cellphone games,” Wong, the executive director of research at Kingston Securities, said.

Tencent owns 62 percent of the firm, formerly known as China Reading, which was created through a merger between the internet giant’s online literature arm and another Chinese online publisher Shanda Cloudary.

Jackson Wong of Huarong International Securities said that the demand for internet companies is very high in the southern Chinese city.

“The concept that this kind of company will be the leader or changing people’s lives, I think this is creating a kind of hype,” he said, drawing parallels between Tencent’s rise and Amazon’s success.

Amazon founder Jeff Bezos is currently the world’s richest man worth $95.1 billion, overtaking Bill Gates, worth $88.5 billion, according to Bloomberg News’ Billionaire Index.

The Shanghai-based firm is the fifth-largest IPO in the city this year, according to Bloomberg News, as the Asian financial hub is increasingly becoming a destination for tech companies.

Popular selfie app developer Meitu debuted on the Hong Kong stock exchange in December after raising $629 million in the largest IPO by a tech company in the city in almost a decade.

Meitu targets teenagers and young adults who use the beautifying app to retouch selfie photos.

“I do think that in the future there would be more and more internet related companies listed in Hong Kong because they can see this time, especially with China Literature, they did quite well,” analyst Dickie Wong said.

Video game accessories maker Razer is also looking to list in Hong Kong and is expected to raise at least $400 million.

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