Chinese online game operator, The9, had a sharp increase of its stock prices on the NASDAQ stock market in New York on the first day of trading yesterday, becoming the third of China's top three game operators to make initial public offerings (IPOs) on the US market.

The9 issued 6.075 million American depository shares on the NASDAQ in the IPO at a price of US$17. The company raised US$103.28 million from the stock sales.

The underwriters of the IPO were Bear, Stearns & Co Inc and CLSA/CIBC World Markets. The underwriters also have an over-allotment option to sell 911,250 shares in addition.

The trading of The9's stocks gained 23.53 per cent to US$21 at the market close. It rose by another 3.29 per cent to US$21.69 in after-hours trading.

Shanghai-based The9 is the last of the top three game operators to get listed on the NASDAQ, after Shanghai-based Shanda and Beijing-headquartered NetEase.

Michael Yin, an Internet industry analyst in Shanghai, said the example of Shanda and NetEase was a major reason for the sharp rise of The9's stocks.

The stocks of NetEase and Shanda were favoured by international investors because of their unique business model and economy of scale.

According to Forbes magazine, NetEase's founder Ding Lei was the richest Chinese in 2003 and Shanda's founder Chen Tianqiao was the second richest this year, brought about by their rocketing share prices.

Yin said that the operation of World of Warcraft, a popular game developed by Blizzard Entertainment of the entertainment giant Vivendi, also brought high expectations for The9's future success.

The9's revenues and net profits in 2003 were US$2.09 million and US$5.86 million, compared with 3.28 million yuan (US$396,000) of revenues and 26.34 million yuan (US$3.18 million) of losses in 2002.

(China Daily December 17, 2004)