Ximalaya Pushes Back Hong Kong IPO Launch Amid Volatility

(Bloomberg) -- Chinese podcasting startup Ximalaya Inc. is pushing back the launch of its planned initial public offering in Hong Kong, in an abrupt change of heart amid market volatility, people familiar with the matter said.

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The Shanghai-based company was speaking with potential cornerstone investors in recent days and was considering to start taking orders as soon as next week if talks go well, Bloomberg News reported earlier. It has now decided to hold off until September at the soonest, the people said.

Ximalaya met with lukewarm demand during early talks with prospective investors, one of the people said, asking not to be identified because the information is private. It ultimately determined that it would be too hard to kick off the offering this month given disagreements over valuation amid the market turmoil, another person said.

The company, which was considering seeking less than $100 million, made the final decision to hold off in the last 24 hours, the people said. Ximalaya hasn’t formally set a new timeline, and details of the offering could still change, the people said. A representative for Ximalaya declined to comment.

Hong Kong’s IPO market has seen its sharpest swing in a decade, with inflation concerns and the war in Ukraine contributing to market volatility. Companies have raised about $2.4 billion through IPOs so far this year, only a fraction of the $26.2 billion raised during the same period in 2021, according to data compiled by Bloomberg.

This month, a few companies including logistics startup GogoX Holdings Ltd. and battery material supplier Tianqi Lithium Corp. are set to defy the slump and are going ahead with their Hong Kong listing plans.

Read More: Hong Kong IPOs See Some Uptick As Semester End Nears

Ximalaya counts Tencent Holdings Ltd., Baidu Inc. and Sony Music Entertainment as backers, a preliminary prospectus shows. The app-based online audio platform launched on Tuesday the first official audiobook versions of the Harry Potter series in Chinese, according to a statement from Pottermore Publishing.

The company first filed for a Hong Kong IPO in 2021. It had previously dropped a plan to list in New York as Chinese regulators stepped up scrutiny over domestic firms flocking to US exchanges, probing them over national security concerns.

Goldman Sachs Group Inc., Morgan Stanley and China International Capital Corp. are joint sponsors of Ximalaya’s Hong Kong offering, the prospectus shows.

(Updates with Harry Potter audiobooks in seventh paragraph.)

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