Traders stand near the broker's booth for 500.com Ltd, a Chinese lottery company. The company made its debut on the New York Stock Exchange on Nov 22, 2013. [Photo / Agencies]
Sports lottery firm raises more than $100m on New York Stock Exchange
More overseas initial public offerings by Chinese lottery websites are likely, after industry leader 500.com Ltd raised more than $100 million on its first trading day on the New York Stock Exchange, analysts forecast.
Closing at $18.64 on Friday, 43.4 percent above its IPO price, 500.com was the first listed lottery company on the Chinese mainland and the third Chinese dotcom to go public in the United States this month.
The Shenzhen, Guangdong-based company had initially planned to raise $75 million from its IPO. Deu tsche Bank AG was the sole bookrunner on the deal.
"We will focus on China's lottery market because of the huge growth potential," said Man San Law, founder and CEO of the company.
"Listing was just the first step for us, and the company will try to expand its market share in the coming years," he said, adding that merger and acquisition deals are possible.
"The executives of the company know how to regulate their business and play under government supervision," said Li Chao, an analyst at iResearch Consulting Group.
The company, founded in 2001, was one of the first to provide online lottery services on the Chinese mainland. It allows users to place bets online and through mobile applications.
The company is one of two entities that have been approved by the Ministry of Finance to provide online lottery sales on behalf of the China Sports Lottery Administration Center.
"500.com has accumulated the biggest user base.
"With the help of powerful lottery information service tools and 400 well-trained employees, the company is probably the most professional lottery website on the Chinese mainland," said Li.
The site has 18.4 million active users and a 29 percent share in the sports lottery market, according to the company's regulatory filing.
Analysts said the IPO is likely to boost online lottery activity in the coming year, and more lottery service providers are considering overseas IPOs following the success of 500.com.
"500.com's competito rs have to tell a different story and find their unique selling point when filing for an IPO," said Li, adding that maintaining good relations with industry regulators is key for any lottery company's prosperity.
China Mobile Lottery E-Platform Technology Co Ltd, a Beijing -based industry information provider, is eyeing a US IPO by 2015, said a source close to the company.
Analysts said that as US investors' confidence in Chinese Internet companies is restored, the number of China IPOs is set to surge in the coming months.
Earlier this month, two Chinese Internet companies - group buying site 58.com and Qunar Cayman Islands Ltd , a travel-booking website - conducted IPOs in New York, raising more than $350 million in total.
In 2011, financial scandals dented investors' confidence in Chinese companies, so the number of China IPOs slumped dramatically.
The recent IPO wave is a strong sign that the US capital markets have reopened for China-based enterprises.
Tech and Web companies remain the most popular candidates for US investors because of the increasing number of Internet users in China.
