ZEN-GAME Successfully listed in Hong Kong
Introduction:The first game company to be successfully listed on the Hong Kong stock market in 2019
On April 16, the domestic chess and card game company ZEN-GAME Technology was officially listed on the Hong Kong Stock Exchange with the stock code "02660". About 180 million shares were issued. The offer price is set at HK$1.23 per H share, and each lot is 2,000 shares.Raise 180 million Hong Kong dollars.
As of the close at 4 pm, ZEN-GAME Technology was quoted at HK$1.61 per share, an increase of 30.89%, and the total market value was HK$1.61 billion.The highest share price of the day was 1.68 Hong Kong dollars per share, an increase of 37%. The total daily turnover of the shares was approximately 325 million shares, with a total turnover of approximately HK$500 million.
Public information shows that ZEN-GAME Technology submitted its prospectus for the first time in November 2018, and passed the Hong Kong Stock Exchange hearing at the end of March this year. It took less than half a year to successfully go public until today.
In the past year, the game industry faced severe challenges in the capital market. According to statistics from Game Gyro, more than 15 game companies have submitted IPO applications since last year, of which only a minority in the Hong Kong and U.S. stock markets have succeeded. As the first game company to successfully go public in the Hong Kong stock market in the beginning of the year, the successful listing of ZEN-GAME Technology will undoubtedly give the industry a boost.
The fifth largest chess and card company in China, with revenue of550million last year and net profit of over100million
According to the Frost & Sullivan report, based on 2017 revenue, ZEN-GAME Technology ranked fifth in the Chinese chess and card mobile game market, accounting for about 4% of the market share. At the same time, according to the 2017 MAU data, the mobile game Fight the Landlord of ZEN-GAME Technology ranks third among similar mobile games in China.
Previously disclosed prospectus, ZEN-GAME technology in 2016, 2017 and 2018, revenues were 338 million, 460 million, 555 million, respectively, corresponding to an annual net profit of about 40.41 million, 66.4 million, 109 million.
From the perspective of revenue-generating business, most of ZEN-GAME Technology’s game revenue is self-developed games. In 2018, the revenue from self-developed games accounted for 85.7%, and the total revenue was about 476 million, but this proportion was significantly lower than that in the past two years. In addition to the effective growth of third-party game revenue, ZEN-GAME Technology mainly achieved a substantial increase in in-game advertising revenue last year, with a cumulative revenue of 73.67 million, accounting for 13.3% of the total revenue.
So far, ZEN-GAME Technology has launched 44 self-developed/published games, of which 19 are card games, 14 are board games, and 11 other games (including casual and hardcore games). During the reporting period, the company has 57 game version numbers, of which 38 are self-developed game products, and the remaining 19 are games that have not yet been put into operation (17 of which have never been launched and 2 have been out of service). In addition, ZEN-GAME has 18 self-developed games that have been developed and are yet to receive a game version number.
Fight the Landlord accounted for 75.8% of revenue, and the daily online "Fight the Landlord" players exceeded 5.1 million
In China, Fight the Landlord can be said to be a nationwide entertainment project. According to past data, ZEN-GAME Technology’s core revenue-generating chess and card products are also the card "Fighting the Landlord" series. Since the launch of the ace product "Fighting the Landlord Everyday" in 2013, after continuous iterative operations, the cumulative number of registered users are increasingly huge.
As of the end of December 2018, ZEN-GAME Technology had a total of 442 million registered players, of which 284 million were card players. Among them, the daily online "Fight the Landlord" users exceed 5.1 million, the monthly active users exceed 21.6 million, and the ARPPU is 35 yuan.
The prospectus also shows that in 2016, 2017, and 2018, Fight the Landlord contributed about ¥285 million, ¥428 million, and ¥421 million to ZEN-GAME Technology, respectively, accounting for 84.4%, 93.1% and 75.8% of revenue in the same period.
Strong "Tencent" genes, successively invested by Zeng Liqing and 37 Interactive Entertainment
ZEN-GAME Technology was formally established in Shenzhen in 2010. Many core team members have worked for Tencent. Its CEO Ye Sheng was previously the product director of Tencent’s QQ game product department, and CTO Yang Min was the development director of Tencent’s QQ game product department. Zeng Liqing, one of the founders of Tencent, is an angel investor in ZEN-GAME Technology, initially holding 26.316% of the shares. It can be said that this is a game manufacturer with strong Tencent genes.
According to the prospectus, 37 Interactive Entertainment, a well-known domestic manufacturer, is also one of its investment shareholders. As early as 2017, 37 Interactive Entertainment invested ¥18 million in ZEN-GAME Technology and obtained a 2.78% stake in ZEN-GAME Technology.
At present, the largest shareholder of ZEN-GAME Technology is Sky-zen Capital, and the actual controller behind it is the company’s CEO Ye Sheng, who holds 30.31% of the shares; the second largest shareholder is CTO Yang Min, who holds 25.67% of the shares; D Fun holds approximately 22.48% of the shares, ranked third largest shareholder.
In response to the successful listing, Ye Sheng, Chairman, Executive Director and CEO of ZEN-GAME Technology Holdings Co., Ltd. said: "The listing of ZEN-GAME Technology on the main board of the Hong Kong Stock Exchange is an important milestone in the company’s development. In the future, we will establish and strengthen its game portfolio and expand its business scale, strengthen its operational capabilities, strengthen its human resources through targeted recruitment, and enhance the monetization ability of the player base, and further consolidate ZEN-GAME Technology's leading participation status in the Chinese chess and card and other casual mobile game markets."
Ye Sheng, Chairman, Executive Director and CEO of ZEN-GAME Technology Holdings Co., Ltd.
After the successful listing on the Hong Kong Stock Exchange, going abroad will undoubtedly become the next important plan of ZEN-GAME Technology. Ye Sheng said at the same time, "ZEN-GAME Technology will make full use of Hong Kong's unique financing platform, continue to seek acquisition and strategic cooperation opportunities, and seize opportunities to enter overseas markets."
Concluding remarks
As a leading domestic chess and card game manufacturer, the successful listing of ZEN-GAME Technology also reflects the optimistic outlook of the capital market for this type of game market. And through the previous Frost & Sullivan report data, we can see the huge development potential of the domestic board and card game market.
According to analysis, the Chinese chess and card mobile game market is expected to reach ¥15 billion in 2019, and it is expected to reach ¥24 billion by 2022.
As of 2017, the MAU of China's Fighting the Landlord was approximately 130 million.
Compared with other types of games, chess and card games usually have a longer life cycle and a stable user group, and some classic chess and card mobile games often have a high market penetration rate. For example, according to the report, in 2017, the penetration rate of Fighting the Landlord in the mobile game market was 21.4%, while its penetration rate in the field of chess and card mobile games was about 58.8%.
With the continuous expansion of the chess and card game market, ZEN-GAME Technology's advantage in fighting the landlord will continue to be highlighted. Nowadays, ZEN-GAME Technology's smooth entry into the Hong Kong stock market will also help accelerate its pace of going overseas, and overseas also has a vast chess and card market.