(Yicai Global) Aug. 10 -- NetEase Cloud Music, China’s second-largest music streaming platform, has postponed its Hong Kong initial public offering after deciding to hang fire until the market environment improves.

NetEase Cloud Music, a unit of Chinese gaming giant NetEase, will choose a better time to restart the IPO as soon as possible, the Hangzhou-based company announced yesterday. It was given the green light to list on the Hong Kong Stock Exchange on Aug. 1 after filing in May.

The delay is connected with the stock market’s recent performance, according to Zhao Kefeng, founder of music service platform 330 Music. China’s tech stocks have plunged amid tightening regulation. NetEase Cloud Music is also in the red, without advantages compared with larger rival Tencent Music Entertainment, so it may not be a good choice to go public, Zhao added.

NetEase Cloud Music’s net loss widened to CNY3 billion (USD463 million) last year from CNY2 billion in 2019, while revenue more than doubled to CNY4.9 billion from CNY2.3 billion, according to its IPO prospectus. In the first quarter of this year, the company recorded a CNY1.7 billion loss.

China has also been tightening up oversight of its tech giants. In the music streaming field, the market regulator last month ordered Tencent Holdings to give up its exclusive music copyrights to restore competition.

That will “undoubtedly pose uncertainties for the future earnings of online music companies, and cause investors to worry about the prospects of the sector,” the Economic Observer quoted Zhang Gang, chief analyst at Southwest Securities, as saying.

Tencent Music and NetEase Cloud Music have long fought over copyrights, driving up prices of music rights dozen of times within a few years, forcing many online music platforms out of business. 

Tencent Music, China’s leading music streaming services provider, listed on the Nasdaq in December 2018. Its net profit rose 4.4 percent in the first quarter from a year ago to CNY926 million (USD143 million) on a 24 percent jump in revenue to CNY7.8 billion.

Editor: Futura Costaglione