By SHE Xiaochen
E-sports company Neo TV filed for a Nasdaq IPO last week, aiming to raise as much as US$550 million (3.8 billion yuan).
Founded in 2006, Neo TV was the first Chinese broadcaster to stream e-sports. Many millennials started playing games after watching The World Cyber Games (WCG) on Neo TV. WCG is an international e-sports with hundreds of gamers from around the world competing in a variety of events, widely dubbed the e-sports Olympics.
In 2015, the company went public on the National Equities Exchange and Quotations (NEEQ), also known as the New Third Board (NTB), an over-the-counter system for trading the shares of public limited companies that are not listed on either the Shenzhen or Shanghai stock exchanges. Neo TV delisted from the NTB in May last year.
Chinese startups are raising billions of dollars again in US stock market listings, after a cool spell in the once-hot market. In 2021, just days after ride-hailing giant Didi Chuxing raised U.4 billion in its IPO, Chinese regulators ordered a cybersecurity review of the company, which delisted later that year. The cool spell in Chinese IPOs in the US is warming again as firms get more regulatory clarity.
Since Neo was founded 16 years ago, the status of TV has completely changed in Chinese society. Perhaps more than anywhere else, TV in China is seen as an “old people’s” medium. The gaming generations now get almost all their information and entertainment through the screens in their hands. Today, TV generates only about 5 percent of Neo TV’s revenue.
But well-established as the main name in e-sports, Neo TV has thrived through live streaming and other flexible deliveries. A total of 90 percent of Neo TV’s income comes from organizing and managing e-sports events. The events themselves flourish, in great part thanks to Neo TV’s coverage of them.
Everything was going swimmingly for Neo until last year. Shanghai’s extensive lockdowns meant that many events had to be canceled. Based in Shanghai, Neo TV was particularly badly hit.
Its prospectus showed the company’s net profit in 2021 to be 18 million yuan, but in the first six months of last year, the company lost 2.9 million yuan.
