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Tencent

NetDragon eyes main-board listing

PUBLISHED : Friday, 02 November, 2007, 12:00am
UPDATED : Friday, 02 November, 2007, 12:00am

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Mainland online game company NetDragon, which debuts today on the Growth Enterprise Market, said it intends to switch to the main board next year.

'By the end of the year, we will fulfil all requirements for a listing on the main board and will apply with the stock exchange to switch to the main board next year,' said vice-president and chief financial officer Joe Wu.

The reason for listing on the GEM is that the company recorded a loss in 2005, said Mr Wu. 'But it is easy to switch to the main board afterwards. We just need to give the exchange some documents.'

Founder and chairman Liu Dejian said the company chose to list in Hong Kong rather than on the Nasdaq - traditionally popular among mainland internet companies - because investors here could better understand NetDragon's operations.

'Fuzhou is just a one-hour flight from Hong Kong. If they want to take a look at our operations, they can do so right away,' said Mr Liu. 'Also, we believe the valuation in the long run can be higher in Hong Kong. Just look at Tencent.'

Tencent, which operates QQ, the mainland's most popular instant messaging platform, is the largest mainland internet company by market capitalisation. It is valued at HK$117 billion, slightly ahead of Nasdaq-listed Baidu's US$13 billion or HK$101 billion valuation.

NetDragon has developed and operates five online games in the mainland. It also operates a self-developed game in other countries.

'The international market accounts for 20 per cent of our revenue; we have games in English, French and Spanish,' said Mr Liu.

Most players of the company's second-most popular game, Conquer Online, were overseas, he said.

Conquer Online had 64 million average concurrent users in the second quarter. Each paying customer spent about 160 yuan per month. For the company's most popular game, Eudemons, average monthly spending was about 120 yuan.