Ourpalm Co. Ltd. (300315.SZ), a leading Chinese mobile phone game company and the first company in its industry to go public in China, surged 50 percent on its debut on ChiNext, China’s Nasdaq-style board, on Friday.
The firm, which received listing approval from the securities regulator in January, offered 40.915 million shares at 16 yuan a piece with a corresponding P/E ratio of 48.
Benefiting from the rapid growth of the mobile gaming market, whose size in 2011 exceeding 40 billion yuan with an average annual compound growth rate of 40 percent, Ourplam.com’s stock price surged 60 percent at market opening, closing up 50 percent at 24 yuan per share
The biggest beneficiary on the deal was Huayi Brothers Media Corp. (300027.SZ), the second-largest shareholder in Ourpalm.com, which spent 148.5 million yuan purchasing 20.97 percent of shares in Ourpalm.com at the end of June in 2010.
Hu Ming, vice president and secretary to chairman of Huayi Brothers, disclosed on April 5, 2012 that the company was expected to bring Huayi Brothers a ROI of 4 to 5 times in less than 2 years if Ourpalm.com went public.
He also said the market capitalization of Ourplam.com could reach 3.5 billion yuan in less than 2 years after its listing.
Surprisingly, Ourpalm.com outperformed on its debut trading day, with market capitalization hitting 3.9 billion yuan at the market closing price of 24yuan.
Funds raised will be utilized to enrich the sequence of the company’s products, mainly devoted to a series of new projects such as cross-platform game community, thus enhancing market competitiveness of the company.
Revenue growth in 2012-2014 is forecasted at 59 percent, 57 percent and 48 percent, respectively, with corresponding gross margins of 52.5 percent, 53.1 percent and 53.9 percent, respectively.
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