On the evening of July 26th Beijing time, domestic esports company NIP Group officially went public on NASDAQ with the stock code "NIPG", becoming the first Chinese esports stock.
In this IPO, Xingjing Weiwu issued a total of 2.25 million ADS (American Depositary Shares) at a price of $9 per ADS, raising a total of $20.25 million (approximately RMB 147 million).
According to the prospectus, He Youjun, the son of the gambling king, is the chairman and CEO of Xingjing Weiwu, and also the largest shareholder of the company, holding 14.2% of the shares. Hicham Chahine, the owner of NIP Club and co CEO of the group, holds 12.4% of the shares, making him the second largest shareholder. Sun Liwei, founder of eStar team and well-known esports player, holds 8.7% of the group's equity. In addition, artist Wang Jiaer joined the company in 2020 as a partner and beneficial shareholder. Xingjing Weiwu's investors also include ZhenFund, Haina Asia Venture Capital, Nyx Ventures, 360, and others.
Xingjing Weiwu is the parent company of eStar and NIP (Ninjas in Pyjamas) electronic sports clubs. The former was established in Wuhan and officially merged with Shenzhen Weiwu in December 2020 to form Xingjing Weiwu. In January 2023, Xingjing Weiwu completed the acquisition of the Swedish esports club NIP through equity swap, jointly forming Xingjing Weiwu (NIP Group).
In terms of specific financial data, the prospectus shows that the net income of Xingjing Weiwu Group has increased slightly from $65.8 million in 2022 to $83.7 million in 2023; The company's net loss increased from $6.3 million in 2022 to $13.3 million in 2023, with the extent of the loss widening.
For the losses, the company explained that one reason is the increase in revenue costs, including the increase in talent management and event operation costs, partially offset by the decrease in revenue costs for the esports team's operation business. In addition, the company's marketing expenses and other expenses have increased.
Xingjing Weiwu's business covers countries and regions such as Asia, Europe, and South America, and its layout includes esports projects such as League of Legends, Honor of Kings, Counter Strike: Global Offensive, Rainbow Six: Siege, CrossFire, etc.
In terms of revenue distribution, as of the end of 2023, Xingjing Weiwu's net revenue from esports club operations, talent management, and event activities accounted for 25.9%, 62.9%, and 11.2% of the group's total revenue, respectively.
The business model proposed by Xingjing Weiwu in the prospectus is "e-sports+", which means incubating events production, talent brokerage, e-sports education, e-sports complexes, IP authorization and other businesses through the brand and traffic effects of e-sports clubs.
He Youjun needs to take a big gamble through IPO financing, "said Zhang Shule, a game industry analyst, to First Financial. The listing of Xingjing Weiwu may provide sufficient funds for it to achieve its goal of" e-sports+". But after a successful listing, the key to the future still lies in the profit model.
The overall profit scenario of the electronic sports industry is not yet clear. Whether it is events or derivative chains, such as esports equipment, esports entertainment physical products, esports concept entities such as esports hotels, etc., they have not truly formed effective interconnection, and it is still difficult to break through their scenes. Zhang Shule believes that in terms of the overall industry, Star Racing Weiwu is facing some challenges.
Zhang Shule analyzed that as a midstream player in the esports industry chain, esports clubs cannot compete with upstream game developers and event organizers who control copyright. Relying solely on scale expansion and participation in multiple events does not constitute the conditions for opening up profit scenarios. Perhaps we can tilt towards the downstream and participate in the promotion, research and development of esports related peripherals to expand the possibility of revenue.
However, the entry of esports into the Olympics has brought some benefits and has also given the industry more stories. On July 23rd, the International Olympic Committee officially passed a proposal at its 142nd session in Paris, France, to host the first Olympic Esports Games in Saudi Arabia in 2025, marking the official entry of esports into the "Olympic" stage.
On July 26th, at the 2024 Global Esports Conference, Zhang Yijun, the first vice chairman of the China Audio Video and Digital Publishing Association, released the "Report on China's Esports Industry from January to June 2024". The report showed that the actual sales revenue of China's e-sports industry in the first half of the year was 12.027 billion yuan, a year-on-year increase of 4.43%, reversing the previous two-year downward trend. In the first half of the year, the number of electronic sports users in China was about 490 million, a year-on-year increase of 0.52%.
This summer, the first esports World Cup will be held in Saudi Arabia. The globalization of esports is further deepening, "Zhang Yijun mentioned at the meeting. Currently, China has the largest number of esports users in the world and its operating income ranks among the top in the world. In the first half of this year, many local governments successively introduced policies to support the e-sports industry, committed to promoting the construction and improvement of the industrial ecosystem, and promoting the development of the e-sports industry. The scale of China's e-sports industry has steadily expanded, and the types of e-sports products and events have become more diverse, showing a trend of branding development.