Razer, the Oughout. S. -Singapore firm that creates PCs and peripherals for players, is set to raise as much as $550 mil from its Hong Kong IPO after this revealed its price range.
The company first filed to go general public in July, and today it verified that it plans to offer 1, 063, 600, 000 shares at a selection of HK$2. 93-HK$4. 00, thatâs about $0. 38-$0. 51. If the complete allocation sells at that best price then the listing would increase $550 million, at mid-rangeÂ thatâs HK$3. 5 billion or $450 mil.
12-year-old Razer plans to invest the proceeds on developing cool product verticals â? it is expected to mention its first mobile device prior to the end of this year â? financing acquisitions and R& D, as well as growing its brand via improved marketing initiatives.
It currently has an impressive following â? the most devoted fans sport tattoo designs of the Razer logo â? because of a mantra of selling items that are âFor Gamers, By Gamers.â
Three-quarters of income comes from the sales of PERSONAL COMPUTER accessories like gaming mice, souped up keyboards, specialistÂ headphones and more, however the firm branched into PC gadgets with the Razer Blade, a top of the line laptop dedicated to portable gaming that will costs more than $2, 000, plus itÂ bought audio visual brand THX in 2016. Â Despite the price, margins on the Blade are low in under three percent.
Razer said in its prospectus that it isnât likely to be profitable for some time as it is centered on expanding its business. Beyond equipment it is betting that a digital solutions play can leverage its brand name to pay dividends, with its payments system â? funded by another buy â? representing a critical part of that will strategy. It aims to grow the presence in key markets such as China, where it claims to function as the top gaming accessories brand, plus North America, which already accounts for 50 percent of sales.
Thatâs yet to come and Razer may point to being profitable in 2014 âÂ to the tune of $20. 3 million â? before failures in 2015 and 2016, $20 million andÂ $59. 6 million, correspondingly. The former, it said, was generally down to the cost of an aborted Oughout. S. listing, while its latest financial year saw an increase within stock options and more R& D. Not including that compensation, Razerâs loss to get 2016 was a more modest $20. 6 million.
Revenue-wise, Razer is in a tricky place. Total sales growth hasnât already been amazing, instead the companyâs true opportunity is that the global games market itself will expand to giveÂ it more customers to sell to.
Thereâs precious little analysis in the peripherals space but a report entrusted by Razer itself concluded that video gaming peripherals were a $2 billion dollars market in 2016. With the bottom of global gamers predicted in order to jump from two billion within 2016 to 2 . 7 billion dollars in 2021, Razer is harrassing investors on that opportunity along with its forays into mobile, AUDIO-VIDEO, services and payments.
Existing backers who have already bought into the eyesight includeÂ Foxconn, Intel, IDC-Accel and Hong Kongâs richest man, Li Ka-shing, who invested via his Redmount Ventures fund.
The SCMP reportsÂ that theyâll be joined simply by committed IPO investors Singapore account GIC, real estate firms Kingkey (China) andÂ Singhaiyi (Singapore), cigarette groupÂ Djarum through Indonesia, and Macau-based casino ownerÂ Loi Keong Kuong. A tranche associated with shares for the public will be provided up this week.
Alongside Razer, Tencentâs China Publishing Group â? an Amazon Kindle-like ebooks company â? is also going public within Hong Kong. The HKSE has increased the appetite for tech firms right after selfie app make Meitu elevated $629 million in a December list.
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