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BUSINESS & TECH

Livestreaming Gamer Takes Playbook to Wall Street

Huya Inc.'s planned initial public offering in New York is being underwritten by Credit Suisse, Goldman Sachs and and UBS. Photo: IC
Huya Inc.'s planned initial public offering in New York is being underwritten by Credit Suisse, Goldman Sachs and and UBS. Photo: IC

Huya Inc. plans to raise up to $200 million in a New York initial public offering (IPO) in what could become the first such U.S. listing from China’s young but fast-growing group of live-broadcasting specialists.

Huya first announced its intent last month, when parent YY Inc. said it had submitted confidential filings for a New York listing. In its IPO prospectus, Huya said the offering is being underwritten by Credit Suisse, Goldman Sachs and UBS.

Huya, an online gaming specialist, is part of a larger group of Chinese live-broadcasting firms that have boomed over the last two years by taking advantage of high-speed communications that allow for high-quality, real-time functions. The rise of such services has helped to resuscitate Weibo Inc., often called “the Twitter of China,” whose shares have more than quadrupled over the last two years.

According to its prospectus filed on Monday in the U.S., Huya has nearly 87 million monthly active users, each of whom spent an average of nearly 100 minutes per day on the company’s app. Its revenue grew 160% last year to 2.1 billion yuan ($333 million), while its net loss narrowed sharply to 81 million yuan from 626 million yuan the previous year.

“We have created an engaged, interactive and immersive community for game enthusiasts of China’s young generation,” the company said in its prospectus. “Our open platform also functions as a marketplace for broadcasters and talent agencies to congregate and closely collaborate with us. … The monetization opportunities for broadcasters and talent agencies are linked to their performance, which motivates them to supply high-quality content to our platform.”

The company counts YY as its controlling shareholder, owning 48% of the company. But online gaming giant Tencent Holdings Ltd. is also a major stakeholder, with about 35%. Last month, Tencent supplied Huya with $461.6 million in B-round funding.

Outside its own core game operations, Tencent has invested aggressively in game developers and operators like Huya both at home and abroad. One of its latest major deals saw it purchase 5% of European gaming giant Ubisoft for 369 million euros ($453.7 million).

Huya’s listing would become the latest in a string of IPOs this year by Chinese firms in New York, including the largest by online video site iQiyi, which raised $2.25 billion last month. Nearly all of those are now trading below their respective IPO prices due in part to uncertainty over a potential trade war between the U.S. and China.

Contact reporter Yang Ge (geyang@caixin.com)

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