What’s new: Alibaba and Tencent-backed mobile game developer QingCi Games Inc. is seeking as much as HK$1.19 billion ($153 million) in a Hong Kong initial public offering (IPO).
The Xiamen-based company plans to sell 85 million shares for HK$11.20–14 each, according to the prospectus. The company said 10% of the shares will be sold in Hong Kong and 90% globally. The subscription will end Thursday, and the stock is expected to debut a week later.
The subscription received a warm response on the first day. As of Tuesday, about HK$909 million of shares in the Hong Kong sale were subscribed, according to information from brokers.
Founded in 2012, QingCi has six mobile game titles in operation and 10 games under development. More than 95% of the company’s revenue comes from one game, The Marvelous Snail, bringing in 1.17 billion yuan ($183 million) of revenue so far this year.
The company reported operating profit of 280 million yuan in the first half of 2021, swinging from a net loss 151 million yuan in the same period last year.
The background: QingCi is riding the success of idle games, or games that play themselves and require very little interaction. In The Marvelous Snail, the player acts as a little snail, which will eventually surpass all other species including humans and become the strongest creature.
In 2018, the popularity of Travel Frog, a free mobile game developed by Japanese company Hit-Point Co. Ltd., drove up the market for idle games. Such games generated 7.86 billion yuan of revenue in 2020, up 352% from a year earlier, according to a research report by GF Securities.
In April, Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Bilibili invested 303 million yuan in QingCi. In following month, the three companies together with Boyu Capital Investment Management Co. Ltd., each bought 101 million yuan of additional shares. Before the IPO, Tencent, Alibaba and Bilibili each holds a 4.99% stake in the company.
An investment unit of Alibaba and Boyu Capital are also among six cornerstone investors in the IPO.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (hello@caixin.com)
Get our weekly free Must-Read newsletter.
