Precise details of the flotation were not included in the early stage edition of the prospectus seen by Variety. These will be updated in future drafts.
Financial industry sources say that the IPO, which is jointly sponsored by Credit Suisse, CMS and CICC, could raise some $300 million for the company. That would be more than double the $142 million it raised in 2014 from an earlier listing on the NASDAQ exchange in North America. In 2016, the company subsequently joined a rush of other Chinese firms, such as Bona Film Group, and games and film group Perfect World, to exit American and seek relisting in mainland China or Hong Kong.
The company describes itself as China’s top independent games platform by monthly average users – some 125 million at the end of December – and as China’s fifth largest overall. It currently operates 55 games, ranging from massive multiplayer games through to social games, such as puzzles and competitions. Most are free-to-play with the company earning revenue from sales of add-ons. It also has a growing non-games portfolio, including e-sports, comics and video.
Revenues in 2017 were $277 million (RMB1.76 billion,) up 12% on 2016. Adjusted profits increased to $37.5 million (RMB238 million) from $26.6 million (RMB169 million).
Chairman and CEO Chen Xiangyu is expected to remain the company’s largest shareholder after the flotation, but he does not control a majority of the company. Social media and entertainment giant Tencent owns 24% while Prometheus Capital, headed by Wang Sicong, son of Wanda’s Wang Jianlin, owns 4%.
Other media and entertainment firms expected to list shares in Hong Kong this year include STX Entertainment and phones to entertainment giant Xiaomi.