Morgan Stanley, Credit Suisse Group AG and China Merchants Securities Co are the joint sponsors of the proposed initial public offering of Meitu Inc, a Chinese photo app developer, according to a filing to the Hong Kong Stock Exchange on Monday.

If it is listed in the Hong Kong Stock Exchange, it will be the biggest IPO after online game developer Tencent Holdings Ltd, which was listed in 2004 with its market value up 300 times in the past 12 years, reaching $249 billion.

The monthly active users of Meitu have reached 446 million as of June, up 81 percent year-on-year, according to its application for the IPO.

Hardware sales, mainly smartphones, are its dominant source of revenue, accounting for 89.9 percent in 2015 and 95.1 percent in the first half of this year.

The company's net loss was 2.2 billion yuan ($331 million) in the six months ended June 30, up 69.2 percent compared with 1.3 billion yuan in the same period last year.

It said that it intends to increasingly diversify revenue sources through increasing in-app advertisements, expanding smart hardware products offerings, developing live-streaming services and building an e-commerce platform.

The Wall Street Journal reported earlier that Meitu had filed an application with Hong Kong regulators on Friday for an IPO that could raise between $500 million to $1 billion and it was expected in the fourth quarter of the year.

The offering will serve as a test of whether that market can compete with New York and the Chinese mainland for a wave of expected startup offerings, reported the Wall Street Journal.

Established in 2008, the Xiamen-based company is one of the most popular selfie app developers.

According to its official website, more than 1 billion mobile devices worldwide use Meitu's products.

Meitu has finished a series of financing from 2009 to 2016.

Its investors include Taiwan electronics manufacturer Foxconn Technology Group, US-based hedge fund Tiger Global Management, China-focused venture capital funds IDG Capital Partners and Qiming Venture Partners.

It was valued at about $3.8 billion after a private fundraising round this year led by Hong Kong asset management firm Keywise Capital Management (HK) Ltd.

The company expects a valuation of about $5 billion from its IPO at the end of this year.

An industry insider said the reason Meitu chose to be listed in Hong Kong, but not in the US lies in most of users coming from the Chinese mainland, and Hong Kong also boasts a large number of users.

Other mainland tech companies listed in Hong Kong include computer maker Lenovo Group Ltd and software firm Kingsoft Corp Ltd.