Soft-World aims at US market

Local online gaming developer Soft-World International Corp (智冠科技) is planning to make an initial public offering on NASDAQ this fall to get a foothold in the US gaming market, a company official said yesterday.

"We need to compete with our Korean and Chinese rivals who have, or are planning to, test the water in the market," Soft-World spokesman Gavin Lin (林盛隆) said.

"The move will definitely help to increase our presence in the US regardless of the performance of our stock there," he said.

Deutsche Bank AG is reportedly to help arrange the offer, but Lin refused to elaborate on details.

Soft-World, known for its product lineups such as Three Kingdoms Online (三國演義) and Jin Yung Online (金庸群俠傳), reported nearly NT$2.8 billion in sales last year, a 27 percent growth from the previous year. It aims at increasing its sales by more than 20 percent this year, Lin said.

The company said last month that it would start to pave its way to the US NASDAQ stock market as soon as the third quarter this year. If Soft-World realizes the goal, it will be the first Taiwanese gaming company to be listed in the market.

Webzen Inc, a South Korean-based online gaming developer, raised US$97 million by selling shares on the NASDAQ in December as part of an overseas expansion strategy. In addition to that, various South Korean and Chinese companies such as Shanda Networking (上海盛大), The9 Online (第九城市) and Optic Communications Co (光通通信) are also considering going public on NASDAQ, Lin said.

Michael Chen (陳培文), an analyst at Capital Securities Corp (群益證券), said he does not think shares of local companies will rocket in the US market as most US gamers focus on video-console games rather than PC online games.

Citing Webzen as an example, Chen said shares of the company declined about 11.7 percent from its debut on NASDAQ. Furthermore, Chen said the fad for Chinese stocks is also fading, citing the lukewarm response for Semiconductor Manufacturing International Ltd (中芯國際集成電路).

"However, this is indeed a good tactic to increase visibility in the market," Chen said.

Wayi International Digital Entertainment Co (華義國際) that debuted Monday on the Gretai Securities Market, the nation's over-the-counter market, said it is also considering selling shares in the US stock market, said Wu Shu-mei (吳淑玫), a Wayi investment relation official.

Wayi, which saw its sales soar to NT$1.07 billion last year may, use its Chinese subsidiary to apply for the NASDAQ listing, Wu said. Around 55 percent to 60 percent of the sales came from the Chinese market, she said.

"Our Beijing branch has higher potential in terms of profitability and innovation capability, so we think the sector will be more appealing to overseas investors," Wu said.

As Chinese stocks are hot in overseas markets, market watchers are speculating that Taiwanese companies are using the identities of their Chinese branches to attract more funds from US investors. But Wu said Wayi made the decision based on the exceptional performance and potential in China.

Softstar Entertainment Inc (大宇資訊) is poised to get on the overseas listing bandwagon, but has not yet laid out its plans on when and which market it would use, company spokesman Angus Huang (黃文相) said.