/ thematic-hk

8 eSports Stocks in Hong Kong

A while ago I started working on a product that would help investment analysts instantly search through hundreds of thousands of company filings on the Hong Kong Exchange. This was part of my 12 startups in 12 months project but it never got enough traction to launch as a standalone product.

I’ve found the tool useful though, and have been using it to run qualitative screens on Hong Kong companies. Think of it like constructing thematic baskets. Rather than taking a top-down GICS sector approach we’re taking a bottom-up approach. We can accomplish this by looking at natural language strings in annual reports that pertain to a certain theme and use it to build a screen.

It’s not exactly an end-research product by itself, but rather a screening tool that could theoretically help analysts find stocks that weren’t on their radar previously. This is especially powerful for under-covered small/mid-caps.

If there’s interest in this type of analysis I’ll keep it up and consider turning it into a regular thematic product.

eSports Screening

The eSports market is exploding. According to Newzoo, an eSports market research firm;

  • 2017 global audience: 386,000,000
  • 2021 global audience: 665,000,000
  • 60,000,000 viewers of the 2017 League of Legends final — more than the combined viewership of the NBA Finals and Oscars
  • 2022 Asian Olympic Games medal event

It appears that the eSports industry is here to stay and its not uncommon to see younger people who watch eSports exclusively. With a global audience and massive popularity in East Asia, led by China and South Korea, the industry is expected to continue growing in the coming years.

Methodology & Results

We looked at all Hong Kong listed companies who have filed annual reports this earnings season. We queried combinations of the words ‘eSports’, ‘e-sports’, and ‘electronic sports’ across every single report they released.

We found 18 stocks that have at least a single match for any of the above terms. We then used TF-IDF to rank these companies by how prominently the keywords feature in the annual reports sampled. This gave us a ranking with which to start scanning the annual reports and split the group into two; 7 stocks with a high TF-IDF score and 11 with a low score.

In the end we found that 3 out of 4 stocks that were currently engaged in eSports had a high TF-IDF score, suggesting that it’s a good indicator. Of the low scores, one company we might consider an eSports play.


We also found that 2 companies with a high TF-IDF score were making moves to enter the market but didn’t derive meaningful revenues from eSports yet.

All told, the results were good. We found a few companies that otherwise would have been very difficult to find as they don’t show up in simple internet searches or quantitative screenings of industry sectors. Of the companies screened I only knew of two, although they did have the largest market cap. In short, this looks like a good way to screen for companies you might not have known existed, or are involved in a particular theme.


Next step is going through the companies individually and understanding their exposure to the theme. This is more traditional stock analysis but the goal isn’t to go as far as a valuation. Rather, we’re just seeking to put each stock in categories that fit how well they give exposure to the theme.

We took the eight companies with relevant TF-IDF scores and came up with two categories;

  • Beneficiaries; companies that benefit from the rise in eSports and competitive gaming, either generally such as game developers and hardware manufacturers, or directly by organising events or owning teams.
  • Up-comers; companies that don’t yet have much exposure buy may have some portion of revenues attributable to eSports in the coming years due to current acquisitions or strategy. These aren’t companies to invest in if you want exposure to the theme today, but companies to watch for.


0776 Imperium — The company’s primary business is household goods but they are making a strategic foray into mobile gaming. Of the companies screened this is the only one that seemed semi-relevant with a low TF-IDF score. eSports isn’t explicitly on their radar and at a glance it doesn’t seem like the games they’re developing are set up competitive play. Also, none of the four games have launched yet. They’re on this list only because they mentioned eSports once in their report, and that was only because they were citing Newzoo, an eSports market research firm… Having said that, they do have the potential to go be a beneficiary of the space, it’s just unclear to what extent.

8203 Kaisun Energy–This is an interesting one. They started out buying coal mines in Central Asia and began diversifying their investments soon thereafter. Their strategy is to own businesses that benefit from China’s ‘One-Belt-One-Road’ initiative. As part of this they have a particular emphasis on eSports which is part of their ‘New Economy Business Unit’ (NEBU). Interestingly they focus on running eSports events and show no appetite for game development or owing teams — rather they prefer to be direct beneficiaries. NEBU have run 4 events so far but it appears to be a small portion of group revenue, loss making business, and they are looking for strategic investors. For that reason we’ve placed it in the ‘up-comers’ list.

1566 China Animations – The company operates the indoor theme park ‘JOYPOLIS’ by Sega which accounts for a big chunk of its profits. It also runs VR and mobile games. They allude to eSports a few times in their annual report but frankly, it seems like a misuse of the term. Having said that, their VR and mobile games could be beneficiaries of the eSports trend.

8178 CITD–The company is a diversified IT business ranging from data-centres and networking to POS systems. The company grows through M&A and is in the midst of acquiring Hong Kong company ‘MT Gamer’ which runs a gaming website and runs online eSports tournaments. The acquisition hasn’t gone through yet which is why CITD is in the ‘up-comers’ list but it’s a promising acquisition that could give the company great exposure to the theme.


1263 PC Partner — PC Partner produce graphics cards on an OEM/ODM basis and is the sole manufacturer of AMD’s reference video graphics cards. They sell their own cards under the brands ZOTAC, Inno3D and Manli. The company has seen flying sales partially thanks to cryptocurrencies but also due to the growth in eSports. They’re spending money on their ZOTAC brand, positioning it for eSports using sponsorship and branding.

700 Tencent — The juggernaut in the room. They are by far the largest cap company in this list and by expected revenues have the largest exposure. They own Riot Games and Supercell, both leading game developers that are pioneering the eSports market. It’s worth noting that gaming is still only a portion of the company’s business, with the majority being driven by its social media platforms WeChat and QQ. Still, if you’re looking for a large-cap eSports play in Hong Kong not only is this your only option, it’s a pretty good option too.

1337 Razer–Freshly listed, Razer is a computer hardware manufacturer that has solidly positioned itself as a brand for gamers. It’s about the only pure-play eSports name of decent size listed in Hong Kong. There’s a direct relationship between the popularity of eSports and consumption of ‘gaming’ hardware–eSports fans spend multiples of what the average gamer does on hardware. The company is a heavy sponsor of eSports tournaments and has 175 players in their branded teams.

To be the world’s LEADING LIFESTYLE brand for gamers ––Razer’s Vision
6899 Ourgame–I’ll admit, I’d never heard of Ourgame before. They are traditionally makers of card and board games in China and also have a mobile games arm. But shockingly (at least, to me) they own through a subsidiary Allied e-Sports(AES). AES is the leading (only?) eSports arena network with 8 stadiums across the US, Europe, and China. They host major tournaments such as CS:Go, Hearthstone, and Overwatch. If you’ve seen pictures of packed stadiums, it’s probably an AES stadium. While current revenues are small by comparison, with the rapid growth in stadiums in the last year it’s likely that AES will start being a bigger part of the companies revenues in the coming years, especially as they face challenges in their traditional games businesses.

So, to summarise;

0776 Imperium — entering mobile gaming
8203 Kaisun Energy — growing a small eSports events business
1566 China Animations — VR and mobile gaming
8178 CITD — acquiring MT gamer: website + online tournaments

1263 PC Partner — graphics cards positioned for eSports
700 Tencent — own major eSports games developers
1337 Razer — gaming hardware + top eSports teams
6899 Ourgame — largest eSports stadiums

We‘re looking at fleshing out this research into a report where we briefly cover all 18 stockings screened and go a little more depth into the relevant company activities. We might look at specific exposures to eSports is by breaking down revenues where we can too. If you’d like access to the report drop me a line!


It wasn’t surprising that Tencent and Razer were part of this list. From a traditional investment perspective they do seem like the best investable options. However, it was interesting to learn about Ourgame and PC Partner who are direct beneficiaries of the eSports megatrend. It will also be interesting to see how the companies in the ‘up-coming’ section fare over the next year. In particular, it will be interesting to see how the MT Gamer acquisition impacts CITD, if at all.

We could improve this screening next time by looking at trends over time and seeing how many companies in aggregate are talking about eSports next year vs. previous years. We could also expand the list of terms related to eSports to capture things like mobile gaming and see if the larger net catches more companies with exposure.

Extending this analysis would require analyse the companies further, possibly doing a revenue breakdown and modelling out the dollar exposure to the theme.

8 eSports Stocks in Hong Kong
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