Zhou Yahui, chairman and president of Beijing Kunlun Tech Co., became a billionaire after shares of the Internet video game developer more than doubled since its trading debut two weeks ago.
Zhou, 37, has a $1.7 billion fortune, according to the Bloomberg Billionaires Index. The stock surged by the 44 percent stock exchange limit at its trading debut on Jan. 21, and climbed by the maximum daily price increase of 10 percent for nine straight days.
The new billionaire is the second in China this week as investors are showing an increasing appetite for the nation’s initial public offerings. Kunlun Tech is also riding a rally in the Shenzhen Composite Index, which tracks equities on the smaller of China’s two stock exchanges, whose 8.3 percent return this year beat all benchmark indexes in Asia.
“Shares jumped because new stocks are rare in China’s A- share market,” said James Hu Jiaming, a Shanghai-based analyst from Capital Securities Corp., adding that “online gaming has been riding a bull market since the second half of last year.”
There has been an “accelerated growth” in the online gaming industry, driven by the popularity of mobile-phone applications such as WeChat, he added.
The gains haven’t made Kunlun Tech expensive relative to its peers. The stock is trading at 34 times earnings, compared with 240 times for China’s information technology companies, according to data compiled by Bloomberg. The Shenzhen index has a multiple of 37.
Spring Airlines Co. Chairman Wang Zhenghua became a billionaire yesterday as the stock surged following the company’s initial public offering, the first for a Chinese airline since 2002.
Shares of the low-cost carrier also jumped 44 percent on its trading debut on Jan. 21 and rose by the daily limit for a ninth day today, pushing his net worth to $1.1 billion, according to the Bloomberg Billionaires Index.