Stranger social platform Momo launched a Hong Kong stock listing plan to regain a high valuation

Reporter | Wu Yangyu Edited | Song Jiannan

On February 14, Interface News exclusively learned that Momo (which has been renamed "Zhiwen Group"), which started as a stranger social platform, officially launched the secondary listing plan of Hong Kong stocks, and the sponsors are Goldman Sachs and CICC.

As of press time, Momo has not commented.

People familiar with the matter said that this is a plan that has just been launched, the listing cycle depends on the situation, if it goes well, the real IPO time point may be from half a year to a year.

Momo has been a company that has been listed on the US stock market for 7 years. On December 12, 2014, Momo was listed on the NASDAQ exchange in the United States, and the underwriters were Morgan Stanley, Credit Suisse and JPMorgan Chase. Its issue price was $13.50, and its first issue closed at $17.02, up more than 26%.

During this time, Momo's listing journey had a twist and turn. According to reports, in June 2015, Momo, which had only been listed for half a year, received a privatization invitation, jointly initiated by Tang Yan, Jingwei Investment, Sequoia Capital and Huatai Ruilian Fund, with an offer of 18.9 US dollars per share, a premium of 20.5% over the previous day's closing price.

The background of this invitation is that the market value of Chinese stocks has been underestimated overseas compared with the high enthusiasm of China's capital market for Internet star companies at that time. Such valuation differences are for investors and even founders, even if they take higher risks, they are willing to return to China to fight for higher returns. For a time, the privatization of Chinese stocks returned to China became a phenomenon.

But a year later, in August 2016, Momo finally decided to abandon this option and continue its status as a Chinese stock.

Momo's stock price has also experienced a round of "roller coaster". The low was $6.042 in February 2016 and has since doubled between 2017 and 2018, peaking at $48.766 in June 2018. However, this trend did not last long, and after three months, its stock price was close to the highest point, and in the following two years, Momo gradually fell below the issue price and bottomed out again.

The second listing of Chinese stocks returning to Hong Kong has become a boom again, can Momo get a high valuation as desired? In terms of recent performance, questions have been raised about the ability of the decade-old company to continue to grow.

In terms of user volume, according to the public data in September 2021, its MAU (monthly active users) was 115.5 million, an increase of 1.6% year-on-year, a weak margin.

In terms of revenue, according to Momo's financial report, its net revenue in the third quarter of 2021 was $580 million, down 0.2% year-on-year, and its net profit was $62.6 million, down 11.8% year-on-year. In the total revenue, Momo App and Tantan App accounted for 86.4% and 13.6% respectively.

In addition, the total number of paid users of Momo's live broadcasting services and value-added services in the quarter was 12.2 million (excluding repeat users), of which 2.9 million were tantan paid users, compared with 13.1 million and 4.1 million in the same period last year.

Despite this, Momo still strives for change. Last August, Momo put the company's legal name "Momo Inc." It was changed to "Hello Group Inc.", and "Momo Group" was officially renamed "Zhiwen Group". More importantly, in 2020, Tang Yan resigned as CEO of the company and became the chairman of the board of directors, and Wang Li, the former president and COO of the company, became the CEO.

Behind this reflects Momo's intention to break social restrictions and then open up more open market areas such as film and television business in order to seek new growth points. If we maintain the stable output of the social basic disk and explore correctly in the right market, Momo may have the opportunity to regain the high valuation it once aspired to.

On February 11, Eastern Time, Momo reported closing at $10.06 per share, with a total market value of $1.981 billion.