Cloud Village is in charge of NetEase’s music streaming business, and the firm boasts 185 million monthly active users.
Cloud Village, the music streaming arm of Chinese tech giant NetEase (NASDAQ: NTES), is working towards an initial public offering (IPO) in Hong Kong. The new move towards an IPO came after a delay of the initial offering back in August. Reportedly, NetEase held off on the IPO due to volatile markets at the time. Generally, tech stocks in China have been declining with the introduction of new regulations from Beijing. Over the past year., there has been significant data protections law and revised anti-trust rules on the tech sector.
NetEase’s Cloud Village Restarts IPO Plans
The latest reports revealed that NetEase had filed a reviewed prospectus with the Hong Kong stock exchange. The prospectus stated that Cloud Village has now concluded to go on with its IPO. As NetEase revives the delayed Hongkong IP for Cloud Village, there are no details on the timing nor the pricing of the offering yet. According to anonymous sources, Cloud Village could seek to raise $500 million in the coming public offering. Earlier, familiar sources said the firm was planning to raise $1 billion in the IPO.
Cloud Village is in charge of NetEase’s music streaming business, and the firm boasts 185 million monthly active users. In addition, the music streaming business majorly generates revenue from subscriptions and advertising. Also, the enterprise’s revenue comes from purchases of virtual items on its platforms. In the nine months, ended on the 30th of September, Cloud Village recorded revenue worth 5.1 billion, equaling $799.6 million. The revenue was a 51.5% increase year-on-year.
Despite the remarkable revenue growth, the company is battling against Tencent’s rival music streaming service. NetEase explained in the filing with the Hong Kong stock exchange:
“Despite a continued increase in its user base, Cloud Village may continue to incur gross and net losses and net operating cash outflow in the foreseeable future, including for the year ending December 31, 2021, due to its continued investments in content, technologies, marketing initiatives as well as reach and development.”
NetEase Hit Games
NetEase is one of China’s gaming giants and has been consistently expanding with its high-profile games. Some of the company’s high-profile games include “Harry Potter” and “Lord of the Rings.”
Speaking on its hit game, Harry Potter: Magic Awakened, NetEase stated:
“The game has attracted a large crowd from young generations. Across the game up community, its leverage designs are gaining greater claims, including iconic European retro picture books and interest in card-based combat. Infused with abundant competitive gameplay, we hope Harry Potter: Magic Awakened will continue to gain adoration from players in China maintaining its popularity over the longer term as many of our other titles do.”
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Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.