China’s Tencent-backed streaming service DouYu $775mn IPO sets this year record, gets media acclaim
DouYu, a Chinese video-streaming service which translates to “fighting fish” in Mandarin, raised $775mn through a Nasdaq listing on Wednesday, Wall Street Journal reports. This IPO was the biggest this year by a Chinese company in the US. DouYu offers both desktop and mobile apps, and counts China’s Huya Inc. and Amazon.com Inc. ’s Twitch among its peers, CNN Business’ Michele Ton notes. The company boastsmore than 153mn MAU, largely due to its videos of people playing popular eSports games such as League of Legends, King of Glory and Tencent’s own PlayerUnknown’s Battlegrounds.
“China’s eSports industry is the world’s largest by revenue and number of gamers, according to iResearch. Last year, some 683mn people, or roughly half the country’s population, played games on phones, computers or game consoles,” DeStream CEO Anar Mekhtiev reminds, “and since China and South Asia largely remain an untapped territory for Western investors, and every properly wrapped big market player has good chances to be welcomed on the US and European markets,” he adds.
The IPO values the company at nearly $4bn. In the 2018 fiscal year, DouYu had $532mn in revenue. Currently, its revenue primarily comes from ad sales. After three consecutive years of net losses, DouYu swung to a net profit of $2.7nm in the three months ended March. The IPO was widely covered by financial media in the US, Switzerland, France, Germany and China.
“Investors have implied a solid P/S 7.5x multiple to these news stocks. This market deal yet again marks the fact that live content distribution, including video streaming, is on top of investors’ priorities and demands,” Anar Mekhtiev concludes.
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