Photo/Shetuwang

Sept. 26 (NBD) -- Chinese mobile game developer CMGE Technology Group Limited (CMGE) has published its second update of the prospectus, according to a filing with the Hong Kong stock exchange on September 24, moving one step closer to the bourse.

A source familiar with the matter told National Business Daily (NBD) that CMGE, which filed for the Hong Kong listing in September last year, is expected to begin trading on the Hong Kong stock market as early as next month. 

The Beijing-based game developer is not new to the capital market. Back in 2012, the company was listed on Nasdaq as a spin-off of Hong Kong-based network media company V1 Group Limited (00082. HK), becoming the first Chinese mobile gaming company going public in the United States. Around three years later, CMGE delisted from Nasdaq, with the intention of returning to Chinese stock exchanges. 

Chinese gaming companies increasingly choose the Hong Kong stock market for listing due to the tightened regulation over the gaming industry in the Chinese A-share market. It is roughly estimated by NBD that nearly 10 Chinese gaming developers have been listed in Hong Kong since 2018.

CMGE is a leading IP-oriented game operator and mobile game publisher. As of June 30, 2019, the company has possessed the largest IP reserve in China, holding licenses for over 31 IPs and owning 68 proprietary IPs.

Meanwhile, the company is financially strong. According to global consulting and research firm Analysys, CMGE ranked first in terms of cumulative revenue generated from publishing games developed based on IPs from January 1, 2015 to June 30, 2019 among all Chinese independent mobile game publishers.

In the first six months of 2019, the company boasted a revenue of 1.5 billion yuan (212 million U.S. dollars) and a net profit of 250 million yuan (35 million U.S. dollars), ranking No. 10 among top 20 Chinese gaming companies in terms of the two metrics, showed Analysys' report. More importantly, CMGE is the sole among the 20 companies that reported an over 100 percent year-over-year increase in revenue for the period, with the rise hiking to 127.19 percent.

Although CMGE has the largest number of published games developed based on IPs, there still sees the risk of yielding increased profits from the IPs.

"We cannot assure you that we will be able to successfully license games developed by third-party game developers and IPs from their owners or that our licensed IPs will be developed into successful games. Our failure to license games and IPs will negatively impact our game portfolio and pipeline, and consequently our results of operations," said the developer in its prospectus.

Email: lansuying@nbd.com.cn