The video game industry in China has always faced difficulties with going public, especially in China’s A-shares (RMB stocks listed in Mainland China), due to press and regulatory pressures. This is the reason why many gaming-related companies either attempt reverse takeovers in Mainland China or seek IPOs in Hong Kong or the US.
However, in January, after the publication of a new official document encouraging cultural industries and mentioning support for public listings and fundraising in China for “qualifying cultural enterprises”, businesses in the gaming sector regained hope. Investors are excited, while the market forecasts an imminent “wave of IPOs” from the video game sector. The CSI media index, which includes gaming stocks, has been rising steadily since early 2024.
Currently, investors have their eyes on several candidates that might seek a public listing in China. NetEase, which is currently listed on the Hong Kong Stock Exchange (HKEX) and on the Nasdaq, have long been seen as “the one that got away” for the Chinese market. Medium-sized companies like XD Inc., owner of gaming platform TapTap was listed on the HKEX in 2019, are viewed as more likely to return to A-shares. MiHoYo, the company behind the global phenomenon Genshin Impact, is also being closely monitored because it had once attempted to list in China in 2017.
Meanwhile, investors are warned that if a “wave” of new IPOs happens in the sector, there is bound to be an impact on existing gaming stocks in China. Another concern is whether it would create a bubble like in 2015. However, most pundits are optimistic, since the industry does need the investment to grow.
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