Hong Kong's public markets are seen as a safer bet for some Chinese companies to raise money, as tech firms like Shanda Games and China Mobile Games and Entertainment Group have chosen to drop Nasdaq over the past year.

Now a Chinese mobile app is planning to use Hong Kong as a launch pad to both enrich back its investors and gain more cash for global expansion. Meitu Inc., a photo retouch app developer backed by Qiming Venture Partners and IDG Capital Partners, is planning to raise US$500 million to US$1 billion via an initial public offering in Hong Kong, according to a securities filing.

The IPO, expected in the fourth quarter of 2016, values the company at US$5 billion and will pave the way for Meitu's venture backers to exit. It will also be a big win for tech start-ups in Xiamen, where Meitu is based, as the southern Chinese city competes with Beijing, Shenzhen and Hangzhou to attract innovative tech companies.

Founded in 2008 by Chinese entrepreneur Cai Wensheng, Meitu's mobile apps allow users to edit photos for posting on social media platforms. The company claims to have 724 million users worldwide.

The company previously received US$10 million series C financing from Qiming Venture Partners in 2014, and completed two venture financing from Sina Weibo, IDG Capital Partners and others before that.

Taiwanese electronics manufacturer Foxconn Technology Group and U.S. hedge fund Tiger Global Management are also the company's investors.

Earlier this year, Meitu completed a private funding round led by Hong Kong-based investment management firm Keywise capital Management at a valuation of US$3.8 billion, according to media reports.