18 September 2018

Video gaming wave culminates in Boyaa’s record-setting IPO

A cool HK$86.8 billion (US$11.2 billion). That’s the amount of funds an obscure game developer, Boyaa Interactive (00434.HK), was able to lock up in its share sale on the Hong Kong market, a record for this year.

When some fear the recent gaming wave led by a series of sizzling initial public offerings may just be a flash in the pan, Boyaa, now the toast of the investment community, has indisputably showcased the genuine allure of the gaming sector that is still ascendant.

Hong Kong Economic Journal, EJ Insight’s parent publication, reports that Boyaa was simply overwhelmed by the more than 77,000 zealous investors thronging its IPO for subscription that was 832 times the firm’s available shares.

Chinese webgame developer Forgame (00484.HK) and Singaporean multiplayer game publisher IGG (08002.HK) also had flying starts not too long ago. As the gaming concept is still the darling of investors across Hong Kong and mainland China, Boyaa couldn’t have picked a better time for its capital market foray.

Boyaa’s solid market position is also a forceful selling point. Established in 2004, the firm is mainly focused on PC-based and mobile chess and card games. Although the company name is not wildly popular, it has several hit offerings based on “Texas Hold ‘Em” and the popular Chinese shedding and gambling game “Dou Dizhu” {鬥地主}, and the firm now boasts a user base of almost 350 million.

Some operation figures featured in the firm’s prospectus are also a big come-on. Boyaa reaped 518 million yuan in operating revenue last year, while the figure for the six months to June stood at 309 million yuan, mostly from the sale of gaming outfits.

The robust increment stemmed from its new income channel. After booking paltry revenue of 1 million yuan back in 2010, Boyaa jumped onto the mobile gaming bandwagon and never looked back. This year it is well on the way to the 200 million yuan mark, thanks to its well-aligned product portfolio – 12 out of its 16 most popular games now have mobile versions tailor-made for iPhone, Android and Windows Phone users.

When Forgame’s book-building was substantially oversubscribed, analysts let out a litany of concerns ranging from piracy and cloning to the lack of presence in overseas markets.

Boyaa is different. It has the proprietary rights to most of the games it operates. Citing statistics from Apple’s App Store, Chinese consulting firm iResearch notes in a report that Boyaa’s Texas Hold ‘Em is the most downloaded mobile poker game application in Taiwan while Dou Dizhu is also one of the popular card games among on-the-go players in Hong Kong.

In 2011 the game maker also made a bold entry into Thailand and is now beginning to reap the rewards – sales in the country climbed to 77 million yuan in the first half this year, representing one fourth of Boyaa’s overall income.

Boyaa shares will start trading next Tuesday.

– Contact the writer at [email protected]




EJ Insight writer

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