Douyin is going to hong Kong to go public? This is encouraging news

Founded in March 2012, After 10 years of hard work, ByteDance is now an Internet giant that can stand shoulder to shoulder with Ali and Tencent. Among ByteDance's many products and services around the world, Douyin, TikTok and today's headlines are the most well-known. Of course, in the past one or two years alone, the rumors about the listing of ByteDance have also attracted considerable attention from the outside world.

On May 8, according to media reports, ByteDance (Hong Kong) Co., Ltd. has now changed its name to Douyin Group (Hong Kong) Co., Ltd., effective May 6, 2022. At the same time, several other companies under ByteDance have also changed their names to "Douyin". Sky Eye check shows that ByteDance Co., Ltd. has changed its name to Douyin Co., Ltd. On the national enterprise credit information publicity system, Beijing ByteDance Technology Co., Ltd. also changed its name to Beijing Douyin Information Service Co., Ltd. The outside world speculates that ByteDance is reconsidering the independence of domestic businesses such as Douyin into Douyin Group in order to go public in Hong Kong. In this regard, the relevant person in charge of Douyin said that he would not comment.

On April 25, 2022, ByteDance appointed Gao Quan as its new Chief Financial Officer (CFO). Since ByteDance announced in November 2021 that TikTok CEO Zhou Washi was no longer serving as CFO, this key position was vacant for five months. According to ByteDance CEO Liang Rubo in an internal letter announcing the appointment, since 2016, High-precision and ByteDance have cooperated many times on acquisitions and financing projects, and believe that she has "a lot of experience and thinking about corporate governance and enterprise development, and has provided advice and assistance to many companies at different stages, and believes that her joining will bring great help to the company."

According to the data, Gao Zhun has provided legal services for the listing of more than 100 companies and other capital market financing projects, including Meituan, JD.com, Pinduoduo and Xiaomi. She has also advised on many M&A and private equity projects, including Baidu and ByteDance. In addition, ByteDance's acquisition of Musical.ly (the predecessor of TikTok), Mu Hitomi Games, and several rounds of private equity financing, with a total transaction value of more than several billion US dollars, high-precision has been deeply involved.

In March 2021, ByteDance appointed Zhou Shoufu, who is based in Singapore, as CFO, which was regarded by the outside world as an important node for ByteDance to start listing, which coincided with Kuaishou's listing in Hong Kong. However, just one month after Zhou Shouzi took office as CFO, on April 23, 2021, ByteDance said: "After careful study, it is believed that the company does not have the listing conditions for the time being, and there is no listing plan at present." Also in November 2021, when Zhou Shouzi was no longer in the CFO role, ByteDance CEO Liang Rubo announced the establishment of six business segments (BU), namely Douyin, Vigorous Education, Feishu, Volcano Engine, Sunrise Lightyear and TikTok. Moreover, ByteDance has incorporated today's headlines, watermelon video, search, encyclopedia and vertical service businesses into Douyin.

According to information released on the Internet, ByteDance's revenue was 6 billion yuan in 2016, 16 billion yuan in 2017, 50 billion yuan in 2018, 17 billion US dollars (about 120 billion yuan) in 2019, 34 billion US dollars (about 240 billion yuan) in 2020, and 58 billion US dollars (about 370 billion yuan) in 2021. As revenue grows larger, a gradual slowdown in year-over-year growth is normal; however, this growth rate is still enough to be surprising. Take ByteDance's biggest competitor in China, Tencent, for example, Tencent's revenue in 2019 was 377.3 billion yuan, 482.1 billion yuan in 2020, and 560.1 billion yuan in 2021. It is not difficult to see that ByteDance's revenue is accelerating closer to Tencent, and this is still in the case of a small contribution to the revenue of overseas markets. Even, it can be said that ByteDance's revenue stands on the $100 billion mark, it is only a matter of time.

Among ByteDance's six major business sectors, the two core sectors are undoubtedly Douyin and TikTok, which can continue to generate huge revenues. In the Douyin section, Douyin and Today's Headlines occupy the center position - Douyin sits firmly on the throne of short video social leaders, and Today's Headlines also occupy the first throne in the field of comprehensive information; moreover, these two core products contribute most of the revenue to ByteDance in the domestic market. TikTok focuses on overseas markets, is widely loved by people around the world, especially young people, and has great market potential in the future.

According to the 2021 annual report released by Questmobile, in December 2021, Douyin (the main APP) had 670 million monthly active users, Douyin Express Edition had 200 million monthly active users, and Douyin Volcano Edition (former volcano small video) had 61 million monthly active users. Today's Headlines (main APP) monthly active users are 330 million, and today's Headlines Express Edition monthly active users are estimated to be 40 to 50 million.

At present, TikTok has more than 1 billion monthly active users, even if India, a country with a population of 1.4 billion, is excluded, it is believed that it will not be long before TikTok will surpass WeChat and become one of the top five social media platforms in the world (ranked by the size of monthly active users on the platform). TikTok is steadily advancing commercialization, and the platform's revenue continues to rise. Market research firm Insider Intelligence said last month that TikTok's advertising revenue could triple to more than $12 billion in 2022, more than the combined rivals Twitter and SnapChat in the same field; by 2024, it is expected to surpass Google's YouTube. It should be pointed out that YouTube's advertising revenue in 2021 is as high as $28.8 billion, and it is expected to maintain growth in the next few years.

TikTok's revenue by quarter

Monthly active users of TikTok in each quarter

Revenue from Google YouTube ads for each year

As mentioned earlier, There are many products under ByteDance, in addition to Douyin, Today's Headlines and TikTok, there are many applications that can be called boutique. For example, Clipping is a popular video editing tool that has about 100 million monthly active users driven by Douyin. It can be installed on computers, tablets and mobile phones, and is one of the best free video editing software in China. In other words, clipping breaks the spell that there is no free, easy-to-use and powerful video editing software in China. For another example, driven by Douyin and today's headlines, Tomato Novel has about 100 million monthly active users, ranking first in the field of free (novel) reading in China, surpassing Seven Cat Novels, QQ Reading, Palm Reading, Book Flag Novel, WeChat Reading, etc. For another example, Pippi Shrimp is a community that focuses on light humor reviews, which is loved by many people, and has tens of millions of monthly active users. As an example, ByteDance recently launched a music streaming application , Soda Music, which undoubtedly gives people who like to listen to songs an extra choice. Soda music and vibrato are connected to each other, similar to YouTube and YouTube Music. In addition to the advantages of youTube Music in the product that is simple and easy to use, the core function is to make intelligent recommendations according to the user's personalized needs, so that users can always hear the music of their own appetite. Guessing that with byteDance's technical strength and experience accumulation in the field of intelligent recommendation, soda music is worth looking forward to... In short, ByteDance continues to create new value for the Internet and even the technology industry, benefiting the public.

With the escort of the two major business sectors of Douyin and TikTok, ByteDance can also have more confidence and confidence to expand into a wider range of markets such as cloud computing, online office, and intelligent hardware, as well as promote market competition. Take the new track of AR/VR, the current global technology giants are lined up, in addition to ByteDance, including Meta, Apple, Google, Huawei, Xiaomi, etc., especially after The launch of Quest 2 by Oculus, a subsidiary of Meta, the hot sales show the huge market potential of VR. Based on the marketing effect of Pico VR products far exceeded expectations, ByteDance has raised its vr sales target in 2022, from 1 million units to about 1.8 million units. According to public data, as of 2021, the Pico series products have sold a total of about 500,000 units, and the sales target of the team in 2022 is more than one million units.

As a VR startup, Pico was acquired by ByteDance in August 2021 at great expense, and the company's business was also incorporated into ByteDance's VR division. ByteDance's acquisition of Pico is seen by the industry as similar to Meta's $2 billion acquisition of Oculus in 2014, a combination of Internet companies and hardware product companies. From the perspective of the platform itself, ByteDance and Meta have similar characteristics - Meta wants to build an ecosystem and build a "meta-universe" through new software and hardware; ByteDance wants to apply its Douyin, TikTok, Today's Headlines and Feishu to a new generation of AR/VR terminal devices. ByteDance's acquisition of Pico, a leading domestic AR/VR hardware supplier, not only has the company's brand and research and development capabilities, but also has a "trump card" to compete in the AR/VR track.

From the perspective of the domestic market shipment share, Pico has been firmly ranked first in the market since 2020. Even looking globally, Pico is currently one of the top five manufacturers in terms of global shipments. ByteDance CEO Liang Rubo previously said that with the strong support of ByteDance, Pico's terminal shipments are expected to increase significantly in 2022; in the next step, Pico will increase investment in hardware such as chips, optics, and sensors, strengthen software research and development in the field of perception interaction, and exert efforts to produce ultra-high-definition VR content. ByteDance's heavy bet in the field of AR/VR hardware is worthy of recognition. In fact, in December 2021, TSMC Chairman Liu Deyin expressed such a view. He predicts that in the next 10 years, people will gradually feel the integration of the real world and the virtual world. As the entrance to the metaverse, the demand for AR and VR in the market will continue to grow. AR devices may replace mobile phones, and VR devices may replace computers (PCs). In addition, Digitimes estimates that from 2022 to 2026, global AR/VR shipments will be 19.1 million units, 30.8 million units, 51.2 million units, 77 million units and 112.3 million units, respectively.

Conclusion: If a technology giant like ByteDance has excellent fundamentals, if its Douyin is successfully listed, it will not only be encouraging news for the capital market, but also investors can invest from the perspective of long-term value. There is reason to believe that the outside world is more eager to see ByteDance go further and further down the road of science and technology (innovation).

(Some of the content refers to Titanium Media)