GUANGZHOU, China — NetEase has launched the Hong Kong initial public offering (IPO) of its music business Cloud Village which could raise around $500 million.

Cloud Village will offer 16 million shares at a price between 190 Hong Kong dollars and 220 Hong Kong dollars. The final price has not yet been set.

There is an option to issue a further 2.4 million shares as part of an over-allotment option.

At the upper end of the range, Cloud Village would raise around 4.04 billion Hong Kong dollars ($519.6 million), not excluding fees and other expenses related to the IPO.

Cloud Village runs NetEase’s music streaming business and the company says it has 185 million monthly active users. Its revenue rose 51.5% year-on-year to 5.1 billion yuan ($799.6 million) for the nine months ended Sept. 30 but it is still suffering heavy losses as it competes for market share against Tencent’s music streaming business.

The company’s revenue comes mainly from subscriptions, advertising and when users buy virtual items on its platforms.

NetEase originally filed for the listing of Cloud Village in August but reportedly delayed the IPO due to volatile markets.

Over the past year, the Chinese technology sector has been facing a tightening regulatory environment in areas from antitrust to data protection, which has hurt the share prices of many of the country’s giants.