Information Memorandum
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Information Memorandum ASIASOFT CORPORATION PUBLIC COMPANY LIMITED (AS) Head Office: No. 9, UM Tower, Room 9 / 283 – 5, 28 th Floor Ramkhamhaeng Road, Suanluang, Bangkok, 10250 Tel. 66 2769 8888 Fax 66 2717 4251 Website www.asiasoft.net and www.asiasoft.co.th Singapore Office: 76 Tanjong Pagar Road, Singapore 088497 Tel.: 65-68258500 Fax: 65-67447025 Malaysia Office: A – 19 – 4, Northpoint Offices, Mid Valley City, No. 1 Medan Syed Putra Utara, 5200 Kuala Lumpur, Malaysia Tel.: 603-22871503 Fax: 603-22871500 Listing Date As at May 29, 2008 (Trading commencement on May 29, 2008) Listing Securities Common shares of 300,000,000 shares at par value of 1 baht per share in total value of 300.00 million baht (Offering to investors 75,000,000 shares at par value of 1 baht per share in total value of 75.00 million baht) Capital As of May 29, 2008 (Trading commencement) Registered Capital Common Shares 316.00 million baht Preferred Shares -0- million baht Paid-up Capital Common Shares 300.00 million baht Preferred Shares -0- million baht Secondary Market The Stock Exchange of Thailand (SET) Offering Price 12.00 baht per share Offering Date May 20- 22, 2008 Objectives and plans for utilizing the capital increase 1. Further expansion and investment of online game service in Vietnam and Malaysia 2. Acquire new license of online games 3. Invest in additional servers and computer system 4. Develop in-house new online games 5. General working-capital Type of Business and Nature of Operation The Group provides “Online Entertainment Services” emphasizing on online game services in Thailand, Singapore, Malaysia and Vietnam with competitive strengths as follows: 1. The Group is a leading regional online game operator in Southeast Asia. 2. The Group’s main business is providing online game services, which have a high potential growth prospect in both global and South East Asia markets, and are able to generate steady cash flow through the sales of @Cash prepaid cards via various and extensive distribution channels. 3. The Group has effective strategies to diversify its investment into a high potential online game markets in several South East Asian countries, which enable the Group to effectively reduce risks in relying on any particular market and increase growth opportunity in the future. 4. The Group has high performance server platform to efficiently provide speed of playing and handle the large number of concurrent gamers. Page 1 / 20 The Group’s main revenues can be divided into 3 types, as follows 20 2005 2006 2007 Revenue Classification Baht Baht Baht % % % Million Million Million 1. Revenue from online game service a 673.52 78.5 817.11 77.3 1,166.72 74.8 2. Revenue from distribution business b 173.86 20.3 210.77 19.9 334.62 21.5 3. Other income c 10.16 1.2 29.50 2.8 57.21 3.7 Total Revenues 857.54 100.0 1,057.38 100.0 1,558.55 100.0 Remarks: a Excluding revenue from online games operated by CONG TY TNHH CHAU A MEM (“CTCM”) in Vietnam b Including revenue from @Cafe membership fees for the right granted to Internet cafes in providing services for games in which the Group has copyrights. c Including CTCM's sub-licence fee to provide online game service in Vietnam venue Classification Baht Currently, businesses of the Group can be classified into 2 main types as follows: 1. Online Game Operator This business generates income equal to 74.6% of total revenue as of December 31, 2007. The Group is a leading online game operator in this region, based on 2006 online game service revenue, with the largest market share in Thailand (at 59.6%) and Singapore (at 69.8%), and the second largest market share in Malaysia (21.2%) and Vietnam (15.8%). As of December 31, 2007, the Group provided online game services in total of 12 games in 4 above countries with more than 8.20 million registered users. Online game is computer game which is played on the Internet and gamers can compete and chat with other gamers in the game spontaneously through the server system on which the main game programme and gamers’ information are stored. Online game operators shall provide services to gamers whose computers have the client programme installed and are connected to the Internet and the gamers register to play games through the online games’ web site. However, Online games do not include games which operate on LAN system only. The online game operated by the Group can be classified into 2 types as follows: a) Massively Multiplayer Online Role-Playing Game (“MMORPG”) MMORPG is an online game which can handle a large number of gamers simultaneously and every gamer can have interaction with each other in real time (Real Time Interaction), which enables the gamers to compete or befriend others as in real life. The story of the games is mostly about action adventures to defend oneself or war adventure. As of December 31, 2008, the Group operates MMORPG namely Ragnarok Online, TS Online, Yulgang, Granado Espada, Legend of 3 Kingdom, CABAL and Ghost Online. In 2007, income from MMORPG game services accounted for 32.0% of the total income from online game services b) Casual Game Casual Game is an online game with cute, colourful cartoon characters. A Casual Game is normally relatively easy to play. Gamers do not need a large amount of time or skills to play and can usually finish the game in a short period of time, thus making the game suitable for relaxation. As of December 31, 2008, the Group operates MMORPG namely Maple Story, Audition, Pangya, GetAmped and Grand Chase. In 2007, the Group’s income from Casual Game services accounted for 68.0% of the total income from online game services Page 2 / 20 At present, the Group charges fee for the online game service through the following 2 methods: a) Air Time Sale Gamers pay fee for the online game service according to the time spent playing the game. This method is mostly used for MMORPG games, with the rate per hour and the rate per day from Baht 3.98-5.60 / hour and Baht 9.87 - 12.60 per day, depending on the type of games and the amount of air time purchased. b) Item Sales In this method, the online game operator allows gamers to play the game for free of charge in order to offer in-game items such as weapons, clothes and accessories to gamers who will decide whether or not to buy the items. The revenue from sold items is considered the Group’s online game service income. However, their price will vary depending on type and popularity of the game, the country in which services are provided, marketing policies in the relevant period and the number of offered items. Items offered in packets will be at a lower price. At present, revenue model of online game services around the world are changing from Air Time sale to Item Sale due to the belief that allowing gamers to play games for free first will attract both existing and new groups of gamers to try and play the games, and thus will increase the opportunity of the Group in generating higher income through the sale of in-game items. However, some online games may use both methods called Hybrid Sale such as Ragnarok Online. The majority of the Group’s customers are children, teenagers, school and university students who are attracted to inexpensive entertainment provided by online games and the online community which provides opportunities for real time communication with others. With the attraction of online games as inexpensive entertainment in comparison to other types of entertainment and easy accessibility from anywhere place with internet connection, online games are one of the top entertainment options for such customers, which do not have high income but have sufficient purchasing power to pay for online game services on a regular basis. In addition, gamers in this region prefer to play games in the internet café located around the whole country which is a factor in contributing to the general popularity of online games among the Group’s target customers. In the past 2 years, the Group has been targeting a new group of customers such as families and working people who have higher purchasing power and tend to play online games regularly in the developed game market. The Group’s online game services in each country except Vietnam are operated through a subsidiary established in that particular country. Each subsidiary has its own server system in order to increase efficiency of service. The Group receives fee payment for online game services in advance through the sale of their @Cash prepaid cards to gamers. At present, the cards are sold through 2 distribution channels: 1) outright sales of prepaid cards to distributors, which are either Internet cafes or convenient stores, which, as of December 31, 2007, there are outlets more than 18,000 in Thailand, 750 in Singapore and 250 in Malaysia; and 2) electronic sales through electronic systems. This advanced payment enables the Group to generate a stable cash flow. To procure online game services in each country, the Group appoints a Game Manager team to be responsible for the procurement and preparation of services. Each team will be responsible for one game. There are 6 steps in the preparation procedures of the Group, as follows: 1) Selection of online games 2) Negotiation and purchase of online game license 3) Preparation of online game service system 4) Distribution of Client Programme which gamers have to install on their computers before their first time plays.