Zheng Tu Network targets US$300m in Nasdaq stock offering

PUBLISHED : Wednesday, 20 June, 2007, 12:00am
UPDATED : Wednesday, 20 June, 2007, 12:00am

Shanghai online game company Zheng Tu Network Technology plans to raise up to US$300 million from a Nasdaq listing as soon as the end of this year, cashing in on one of the fastest-growing markets in the world for internet games, sources said.

The company develops and operates a popular game in the mainland called Zheng Tu, which claims to have more than one million users at peak times. That is second only to the country's most popular game, Fantasy Western Journey by NetEase, the nation's largest online game company which attracts 1.5 million peak-time users.

UBS is the underwriter of the deal, according to sources.

Both UBS and the company declined to comment.

Frank Lu, who works as a producer of games for US software company Microsoft at its Beijing research and development centre, said the game had captured a large audience in the mainland because it was easy to play and innovative.

Total revenue in the mainland's online game market reached 2.56 billion yuan in the first quarter, up 26 per cent from the previous three months ago, said Beijing market research firm Analysys.

Analysys said Zheng Tu had surpassed The9 as the country's third-largest online game company by revenue. Analysys estimated Zheng Tu had 14.85 per cent of the market, lagging Shanda and NetEase, which both have more than 18 per cent. The9 was estimated to have 10.16 per cent of the market.

Zheng Tu founder Shi Yuzhu is a legendary figure in the mainland. He first made his fortune producing software in the late 1980s and early 1990s.

When he tried to develop the mainland's tallest building in Zhuhai, his company almost went bankrupt. In 2000, the entrepreneur made a comeback by selling health drinks for the elderly.

Mr Shi founded Zheng Tu in 2004 and started developing the game. It was commercially launched in August last year.

Zheng Tu will join NetEase, Shanda and The9, which have already listed on Nasdaq.

Logging on

According to Analysys, total revenue in the mainland's online game market in the first quarter reached : Y2.56b