A 15% rise in the stock price of mobile and Internet game developer Ourpalm in the last two days of trading in China before the Lunar New Year has helped to lift the company’s chairman Yao Wenbin into the ranks of the world’s billionaires with a fortune that Forbes estimates at $1.2 billion.
Yao joins Ma Huateng and Zhang Zhidong of Tencent, William Ding of Netease, and Chen Tiaoqiao of Shanda Interactive as entrepreneurs from the country whose billionaire fortunes are closely tied to Internet and mobile game success. China tops the world with 1.2 billion mobile phone users, some two-third of which connect to the Internet.
Shares in Ourpalm, based in Beijing, closed up 10% on Thursday to an all-time high of 41.44 after the company on Jan. 27 estimated its net profit for the 2013 calendar year would increase between 75% and 95% from a year earlier to 144-160 million yuan, or $23.8-26.4 million. Ourpalm attributed the increase in profit an increase in sales and the acquisition of Dovo Technology in July.
A late-January reduction in the number of Yao’s shares that have been collateralized also helped to lift our estimate of his wealth.
With a market capitalization of 29.2 billion yuan, or $4.8 billion, on Thursday, the company was trading at a nose-bleeding earnings multiple of 182 based the upper end of its profit forecast. China this year ended a more than year-long ban on IPOs that has helped to drive up the valuations of the country’s relatively healthy companies.
Yao holds an undergraduate degree in communications engineering from Xidian University and a MBA from Tsinghua University.
Ourpalm was founded in 2004.
China’s bourses closed for the Lunar New Year holiday on Jan. 29, and will reopen on Friday, Feb. 7.
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Source: Forbes Business