Chinese gaming company Qingci Games disclosed its earnings forecast for 2021 last week, the first since its IPO in December 2021.
The company expects a net profit of approximately 415 to 440 million RMB in 2021, achieving an increase of 150.0% to 165.1% over the same period of the previous year.
The rapid growth of profit is attributable to the excellent market performance of The Marvelous Snail and Lantern and Dungeon, Qingci's star mobile games launched in June 2020 and March 2021, respectively.
The Marvelous Snail
The Marvelous Snail is an idle game developed by Peter Wang, the producer of Gumballs & Dungeons. The game soon gained popularity in the Chinese market, recording a turnover of more than 400 million RMB in the first month of its launch, while the average MAU from June to December 2020 was 4.4 million.
Lantern and Dungeon
Lantern and Dungeon, a rogue-like RPG published by Qingci Games, also had a successful performance in China in 2021. The game generated a flow of more than 185 million RMB in the first month after its release and once ranked No.4 on the Chinese IOS Game Bestseller List.
According to Qingci Games' prospectus, in the first half of 2021, its revenue increased to 760 million RMB, of which The Marvelous Snail accounted for 67.7%, and Lantern and Dungeon accounted for 30.1%.
The extraordinary earning growth can be quite an excellent piece of news for Qingci's investors. Faced with the highly-competitive mobile gaming market and tightening regulation from the government, the small and medium game studios in China, including Qingci Games, are now experiencing a hard time. The number of newly registered Chinese mobile game enterprises fell by 19% in 2021, while multiple games are ceasing service in China.
The IPO ceremony of Qingci Games
Although Qingci Games is still favored by multiple Chinese tech giants and has received investments from Tencent, Alibaba, and Bilibili, its stock soon decreased nearly 9% from the issue price of 11.2 HK$ after its IPO in Hong Kong Stock Exchange. As of February 28, the share price of Qingci Games has fallen to 5.23 HK$, almost half of its issue price.