Equities

GMM Music Plans IPO, Valued at $700M Post-Tencent Deal

GMM Music plans IPO by 2025 after Tencent's 10% stake boosts valuation to $700 million.

By Alex P. Chase

7/11, 04:46 EDT
article-main-img

Key Takeaway

  • GMM Music Pcl plans an IPO as early as this year, following Tencent's 10% stake purchase, valuing the company at $700 million.
  • GMM Music's Q1 revenue rose 11% to $27 million, contributing 70% of its parent company's income.
  • Sichuan Biokin Pharmaceutical Co. aims to raise $500 million in a Hong Kong listing amid a subdued IPO market.

GMM Music's IPO Plans

GMM Music Pcl, Thailand's largest music company and a unit of GMM Grammy Pcl, is planning an initial public offering (IPO) as early as this year or in 2025. This follows a recent equity investment from China's Tencent Holdings Ltd. Chief Marketing Officer Fahmai Damrongchaitham stated in an interview that the company aims for an IPO "as soon as possible" depending on market sentiment. The strategic investment from Tencent, which involved purchasing a 10% stake in GMM Music, boosted the company's valuation to approximately $700 million. GMM Grammy, one of Thailand's largest media groups, announced last year that it plans to offer up to a 30% stake in the music unit to both repay debt and fund business expansion.

Fahmai emphasized the importance of the Tencent investment, calling it a "very important milestone." Initial share sales in Thailand this year have raised about $457 million, a 13% drop from the same period last year, according to Bloomberg data. GMM Music's first-quarter revenue rose 11% from a year earlier to 978 million baht ($27 million), accounting for about 70% of its parent company's total income. GMM Grammy's other main businesses include home shopping, movies, and television. GMM Music also plans to expand its music business in other Asian markets through partnerships with companies including Tencent and YG Entertainment Inc.

Sichuan Biokin's Hong Kong Listing

Sichuan Biokin Pharmaceutical Co. has filed for a Hong Kong listing that could raise about $500 million, according to sources familiar with the matter. The drugmaker, already listed in Shanghai, filed a preliminary prospectus without detailing the size of the IPO. Goldman Sachs Group Inc., JPMorgan Chase & Co., and Citic Securities Co. are joint sponsors for the share sale. The size of the IPO may change as deliberations are ongoing, according to the sources. Biokin did not respond to a request for comment.

The company, based in Chengdu, has research and development centers in China and the US, along with other facilities. Hong Kong's market has been subdued recently, with IPOs slumping to their lowest level in two decades in 2023. While activity is picking up, sentiment remains cautious as half of the six latest debuts fell below their offer prices. Biokin started trading at 24.70 yuan in Shanghai early last year, soaring over 120% in two weeks to 54.60 yuan. It was trading at 162.32 yuan on Thursday afternoon, giving the company a market value of 65 billion yuan ($9 billion).

European IPO Market Dynamics

Private equity firms are increasingly snapping up initial public offering candidates in Europe, affecting the region's IPO pipeline. Recently, bus and train operator Flix SE's listing plan was shelved when investment firm EQT AB and German logistics tycoon Klaus-Michael Kühne acquired a 35% stake. Similarly, Platinum Equity agreed to a deal for Nordic Capital's German wheelchair maker Sunrise Medical shortly after the company laid out IPO plans.

These takeover offers provide a respite for private firms struggling to raise cash via IPOs. For instance, Permira-backed Golden Goose Group SpA shelved its Milan share sale last month, and Tendam, a clothing retailer backed by CVC and PAI, postponed plans to list this summer in Madrid. Bankers note that last-minute sales to financial sponsors highlight the gap between public and private investors, with portfolio managers reluctant to pay top dollar for relatively unknown new stocks.

"Private equity has enormous dry powder that needs to be deployed, so they are often willing to pay higher prices to acquire a company than are currently achievable in an IPO," said Liberum strategist Joachim Klement. "Companies that are looking for new capital are thus often choosing to sell themselves to private equity or competitors rather than IPO." However, Klement added, "As the mood for IPOs improves, we think the pendulum will increasingly swing back in favor of listings."

Management Quotes

  • Fahmai Damrongchaitham, Chief Marketing Officer of GMM Music:

    "We are aiming for as soon as possible depending on the market sentiment."
    "The strategic investment with Tencent is actually a very important milestone."