New Stock Pricing | Qingci Games received 3.64 times oversubscription, priced at HK$11.2 per share.

Futu News, December 15th, announced this Wednesday$QINGCI GAMES (06633.HK)$Announcement: the company has issued 85 million shares, priced at 11.2 Hong Kong dollars per share, with a board lot of 500 shares, and is expected to be listed on December 16th.

During the public offering phase, Qingci Games received approximately 3.64 times oversubscription, with the final number of shares allocated to the public offering being 8.5 million shares, accounting for 10% of the total number of shares offered (prior to the exercise of any over-allotment option). A total of 8908 valid applications were received, with a 20.80% allotment rate for one board lot, and a 5 to 1 subscription ratio.

In addition, the international offering has received a moderate oversubscription. The final number of shares offered is 76.5 million shares, equivalent to 90% of the total shares offered (before the exercise of any over-allotment option). Futu News has compiled the relevant data in the following table:

Approximately 0.863 billion Hong Kong dollars of net proceeds will be used for the following purposes: 35% will be used to expand the company's gaming product portfolio and invest in the company's gaming R&D capabilities and related technologies; 25% will be used to expand the company's business in overseas markets; 15% will be used to enhance the company's gaming distribution and operation capabilities in the China Mobile gaming market, as well as the market visibility of the Qingci brand and the company's IP; 15% will be used for strategic investment and acquisition of companies upstream and downstream in the mobile gaming industry chain; 10% will be used for working capital and general corporate purposes.

Qingci Games is a well-known Chinese mobile game developer and publisher, as a leading enterprise in Chinese casual games (especially idle games) and Rogue-like RPGs. The company has developed, published, and operated multiple popular games. As of the last practicable date, the company operates six mobile games and has 10 mobile game reserves.

According to Frost & Sullivan, by revenue calculation, Qingci Games held a 0.4% market share in 2020, ranking 20th among participants in the China mobile gaming market; by revenue from casual games and idle games, the company ranked 3rd and 2nd respectively among all mobile gaming companies in China in 2020, holding 4.4% and 16.7% market share.

In terms of key operational indicators, as of June 30, 2021, the average MAU for all games of the company exceeded 3 million people.

According to the prospectus, the company achieved strong financial performance during the historical period, with growth mainly driven by new game launches.

From 2018 to 2020, Qingci Games achieved revenues of RMB 0.098 billion, RMB 0.089 billion, and 1.227 billion yuan respectively, showing explosive revenue growth in 2020; net profits for the same period were RMB 0.025 billion, RMB 0.02 billion, and 104 million yuan, with a compound annual growth rate as high as 104%.

In the first half of 2021, Qingci Games achieved revenue of 0.763 billion yuan, a significant increase compared to 0.089 billion yuan in the same period last year; while the net loss for the same period was 0.094 billion yuan, a year-on-year narrowing of 40%.

The Chinese gaming market has become the world's largest gaming market, with a market size of 308.4 billion yuan in 2020. It is expected that the market size of the Chinese gaming market will further increase to 504.5 billion yuan by 2025, with a compound annual growth rate of 10.3% during the period, surpassing the expected compound annual growth rate of the global gaming market of 7.3% during the same period.

With the continuous development of mobile communication technology, the increasing penetration rate of mobile phone users, and the shift of entertainment consumption to mobile devices, the Chinese mobile gaming market is rapidly growing at a compound annual growth rate of 25.3%, increasing from 97.2 billion yuan in 2016 to 239.6 billion yuan in 2020. It is expected to reach 432.1 billion yuan by 2025, with a compound annual growth rate of 12.5% from 2020 to 2025.

Editor/Aurora

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