Tencent-backed game live-streaming site Huya seeks Nasdaq listing

Huya, China’s answer to the game-streaming site Twitch, is seeking to raise as much as US$200 million in an initial public offering on the New York Stock Exchange.

The Guangzhou-based company, which counts Tencent Holdings as a shareholder, has 86.7 million average monthly active users - about 12 times the population of Hong Kong - who spend an average of 99 minutes on the platform, a filing to the Securities and Exchange Commission on Monday showed. 

Huya reported a net loss of 81 million yuan (US$12.5 million) in 2017, narrowing from a deficit of 625 million yuan a year earlier, the filing showed. The company derived most of its revenue from advertising and value-added services such as sales of virtual gifts to users, who buy them for their favourite broadcasters.

China has become the world’s largest games market in terms of revenues and gamers, according to consultancy Frost & Sullivan Research. The country had 646 million gamers as of last year and is expected to have 917 million in 2022.

It is also home to the largest active user base of live streaming, with the industry revenue expected to grow from last year’s US$5.5 billion to US$16.5 billion by 2022, according to figures Huya quoted in the filing. Total revenue of the country’s game live-streaming market is projected to experience “significant growth” and reach US$4.9 billion by then. 

Tencent, Asia’s biggest company by market cap, has an almost 50 per cent share of China’s gaming market and is betting on both Huya and Douyu. Other streaming platforms including Bilibili and Kuaishou have also reportedly been increasing their gaming content.

Huya will use the proceeds from the IPO to pay for promotional activities, strengthen content and e-sports partnerships, and enhance technologies, according to the filing.

Tencent is Huya’s second-largest shareholder with a 34.6 per cent stake, behind Huya’s controlling company, YY.