Report
Aequitas Research
Zhen Zhou Toh
EUR 94.03 For Business Accounts Only

Archosaur Games (祖龙娱乐) Pre-IPO - Short life cycle, volatile revenue, but it may look different next year

Archosaur Games (ARCH) is looking to raise about US$200m in its upcoming Hong Kong IPO.

Archosaur Games (ARCH HK) is a mobile game developer in China with a focus on mobile (massively multiplayer online role-playing game) MMORPGs. The company is backed by Tencent and Perfect World and has a track record of developing and publishing popular MMORPGs which include Dragon Raja (龙族幻想), Fantasy Zhuxian (梦幻诛仙), and Loong Craft (六龙争霸).

ARCH’s revenue generation is volatile stemming from the short life cycle of mobile MMORPGs. Margins were largely stable and trending higher due to heavier exposure to overseas markets, which tend to generate better margins, and a shift towards licensing and development (which collects revenue on a net basis).

ARCH is actively looking to resolve the volatile nature of revenue by expanding into other game genres such as simulation games (SLG), shooting games (STG), and turn-based strategy games which could eventually help smooth out the boom and bust cycle of MMORPG. These games are already in the development pipeline and will be launching between 2020 - 2022.
12/05/2020 1 EN
Underlying
Arch Resources Inc. Class A
Arch Resources Inc. Class A

Arch Coal is a coal producer. The company's main business is the production of thermal and metallurgical coal from surface and underground mines located throughout the U.S., for sale to utility, industrial and steel producers both in the U.S. and around the world. The company's segments are based on two lines of business, metallurgical coal and thermal coal, and may include a number of mine complexes. The company's segments are: the Powder River Basin, containing primary thermal operations in Wyoming; the Metallurgical, containing metallurgical operations in West Virginia; and the Other Thermal, containing supplementary thermal operations in Colorado, Illinois, and the Coal Mac thermal operation in West Virginia.

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US0393804077 United States
Provider
Aequitas Research
Aequitas Research

Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m. 

Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
 
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
 
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.

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Analysts
Zhen Zhou Toh

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