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Lehman Brothers and Deutsche Bank areunderwriters of the deal, according to the sources. Kingsoft officials declined to comment.
Kingsoft has decided against following the path of rival online game companies such as Netease, Shanda and The9, which have opted to list on the Nasdaq. Instead, it has turned to Hong Kong because it has a cheaper listing process. The company also believed a New York listing no longer garnered a higher valuation, said a person familiar with the company.
"The cost is lower in terms of fees and compliance with the United States' Sarbanes-Oxley Act, and it's just less hassle," the source said.
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Beijing-based Kingsoft, founded in 1988 by chairman Kau Pak Kwan, was once regarded as the Microsoft of the mainland, dominating the market with its self-developed word processor, spreadsheet and other applications.
Kingsoft's anti-virus software became one of the 10 most popular in the Asia-Pacific region excluding Japan in 2005, according to IDC. The company, which has not yet released revenue or profit details, made US$8.4 million from anti-virus software in 2005, up 23.5 per cent from US$6.8 million in 2004, IDC said.
The company has a broad pipeline of games, and although it has yet to produce a blockbuster, many are quite successful.
Last August, the company received US$72 million in investment fromventure capitalgroups Government of Singapore Investment Corp, Intel Capital and New Horizon Evergreen.
Kingsoft has a 2.69 per cent share of the mainland online game market, according to Beijing-based researcher Analysys.
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