Stanley Ho's youngest son Mario sets sights on China's first esports IPO in the US

Esports entrepreneur Mario Ho Yau-kwan, the youngest son of the late Macau casino tycoon Stanley Ho Hung-sun, is seeking to expand the international reach of his organisation NIP Group, as it pursues an initial public offering (IPO) in the United States.

NIP is a Cayman Islands-based holding company, with operations primarily conducted through two wholly-owned subsidiaries: Ninjas in Pyjamas Gaming in Sweden, which is engaged in esports teams operations; and Wuhan Xingjingweiwu Culture & Sports Development Co, which is involved in esports teams, talent management and event production operations. Its principal executive offices are located in Stockholm.

The company - in which co-founder, chairman and co-chief executive Ho holds a 14.2 per cent stake - has filed for an IPO on the Nasdaq Stock Exchange, according to a filing on Wednesday with the US Securities and Exchange Commission. Once its IPO is completed, NIP would become the first listed Chinese company in the esports industry.

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"Today, growing esports into a generational audience worldwide is what we are busy doing," Ho and co-founder and co-chief executive Hicham Chahine said in a letter, addressed to potential investors, attached to the group's prospectus. "Esports have the power to change the world, and we at NIP Group have a responsibility to continue to develop the industry in a sustainable way."

Mario Ho Yau-kwan, the co-founder, chairman and co-chief executive of NIP Group. Photo: Xiaomei Chen alt=Mario Ho Yau-kwan, the co-founder, chairman and co-chief executive of NIP Group. Photo: Xiaomei Chen>

While the group's US filing did not disclose the amount of money it intends to raise, a documents released in May by the China Securities Regulatory Commission showed that the company plans to issue no more than 26.9 million common shares on the Nasdaq.

NIP intends to use the net proceeds from its US listing for working capital, expanding the presence of its esports teams, marketing and growing their fan base, potential strategic acquisition and investment opportunities, according to its prospectus.

The group's listing plan reflects the growing popularity of esports around the world, as well as its vast commercial opportunities.

The market size of the global esports industry is expected to reach US$102.4 billion in 2027, up from US$57.9 billion in 2022, according to a Frost & Sullivan report cited in NIP's prospectus. NIP was described by the report as "a leading esports organisation" with the most expansive global footprint on the back of operations across Asia, Europe and South America.

Stockholm-based Ninjas in Pyjamas Gaming, which is engaged in esports teams operations, is a wholly owned subsidiary of NIP Group. Photo: Ninjas in Pyjamas alt=Stockholm-based Ninjas in Pyjamas Gaming, which is engaged in esports teams operations, is a wholly owned subsidiary of NIP Group. Photo: Ninjas in Pyjamas>

While it recorded a net revenue of US$83.7 million last year, up from US$65.8 million in 2022, NIP is still a loss-making enterprise. Net loss last year widened to US$13.3 million, compared with US$6.3 million in 2022. The company's prospectus said that loss reflected the "substantial investments we made to grow our business".

Also in 2023, revenue in China's esports sector fell 1.3 per cent year on year to 26.4 billion yuan (US$3.6 billion). That was mainly attributed to a decline in esports live-streaming revenue, which accounts for the largest proportion of the domestic market, according to a report by the Esports Working Committee, a semi-official agency set up to oversee the domestic industry.

In January 2023, NIP completed what it touted as "the largest merger in the history of the esports industry", according to its prospectus. The group combined Swedish esports brand Ninjas in Pyjamas with ESV5, one of the largest digital sports groups in China.

Hong Kong-born rapper and singer Jackson Wang. Photo: Jonathan Wong alt=Hong Kong-born rapper and singer Jackson Wang. Photo: Jonathan Wong>

Still, the challenge of making a profit in a nascent industry did not faze Hong Kong-born pop star Jackson Wang from investing in the company. Wang, who is best known as a member of K-pop band Got7, joined NIP as a partner and beneficial shareholder in 2020, according to the company's prospectus.

NIP's planned IPO has come at a time when some local governments on the mainland are ramping up support for esports, as part of broader efforts to develop and transform the country's digital economy.

Authorities in Shanghai and Shenzhen, for example, last year joined forces with the China Audio-Video and Digital Publishing Association, the country's semi-official video gaming trade body, to promote the development of esports.

In 2022, Hangzhou - capital of eastern Zhejiang province and one of China's hubs for technology start-ups - pledged 100 million yuan in annual funding to support video gaming and esports.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.