Mobile gaming giant China Mobile Games and Entertainment Group has made the pioneering move of filing for listing on the Hong Kong Stock Exchange after delisting from Nasdaq.
An intellectual-property-oriented mobile games operator, CMGE is a mainland-based market leader in both volume and revenue in developing games based on IPs.
Company founder Hendrick Sin, who is also president of the Internet Professional Association, modestly attributed the company’s success to the fact that it was a first mover in mobile games publishing.
Entering the market at a time when online games were played on the computer, the company subsequently forayed into the mobile phone platform in line with market development.
The mobile games market is huge and competition is extremely stiff. CMGE establishes a strong foothold by leveraging on, among other strengths, the ownership of well-known intellectual property rights, which attracted giant enterprises and platforms like Tencent to partner with it.
Developing mobile games is an extremely high-risk investment, Hendrick says, with probably only one in 10 projects bearing fruit, but the company has intellectual property ownership as an asset in promotion and gaining users.
Locally, the mood for initial public offerings is only average, so Hendrick will have to be conservative with his company’s valuation in the floating exercise.
But he is convinced that for companies with a China concept like CMGE, Hong Kong is a better place for raising capital than the US. Therefore, he worked with funds earlier to privatize the company and came back to Hong Kong to launch an IPO.
There were reports earlier about the US delisting companies with a China background. Such reports have not been confirmed, but market interest in such shares has been somewhat dampened.
By returning from the US for listing in Hong Kong, CMGE is apparently taking yet another first-mover step.
Siu Sai-wo is publisher of Sing Tao Daily