Tencent Music Entertainment - the Tencent subsidiary that operates the Chinese web giant's music services - has announced that its shares will started trading on the Hong Kong Stock Exchange next Wednesday. It's a secondary listing, as the firm's shares already trade on the New York Stock Exchange.
The Tencent Music company operates three streaming music services in China - QQ Music, Kugou Music and Kuwo Music - as well as the popular karaoke platform WeSing and various other music ventures. It also used to be the exclusive distributor in China of the catalogues of many labels, including the majors, but under pressure from the Chinese competition regulator those exclusivity deals have been phased out.
Originally a division of the main Tencent company, which is already listed on the Hong Kong Stock Exchange, Tencent Music was spun off as a standalone entity and listed on the New York Stock Exchange back in 2018. Although the Tencent parent company remains by far the biggest shareholder.
New York will remain Tencent Music's primary listing even once its shares start trading on the Hong Kong exchange next week. And, in case you wondered, Tencent shares on the two exchanges will be fully 'fungible'. Because I think we can now all agree that things are always better when they're fungible.
As for the motivation behind the secondary listing closer to home, Reuters notes that Tencent Music "is the latest in a string of US-listed Chinese firms to opt for a second listing in Hong Kong to offset the threat of being delisted in New York due to a bilateral dispute between Washington and Beijing over access to auditing papers".
A deal was recently done that will hopefully end that dispute, with US government officials heading to Hong Kong to start reviewing paperwork linked to those US-listed Chinese companies. But still, good to have a back up plan I guess in case that all falls apart.