Youjiu Games plans to restructure the entire industry chain or purchase Changyou's assets

This is a magnificent reorganization picture: first, 588 million yuan was divested of the original coal business, and then shares were issued to acquire 100% equity of Shanghai Shengyue Network; and then 278 million yuan was invested in the game live broadcast platform Longzhu TV. The company's latest progress announcement also revealed that it is negotiating major transactions with domestic game leader Changyou, involving overseas listing entities, the dismantling of overseas VIE structures and the acquisition of overseas operating assets.

The suspension was suspended for more than four months, and the major restructuring plan of Youjiu Games (600652) was gradually emerging.

This is a magnificent reorganization picture: first, 588 million yuan was divested of the original coal business, and then shares were issued to acquire 100% equity of Shanghai Shengyue Network; and then 278 million yuan was invested in the game live broadcast platform Longzhu TV. The company's latest progress announcement also revealed that it is negotiating major transactions with domestic game leader Changyou, involving overseas listing entities, the dismantling of overseas VIE structures and the acquisition of overseas operating assets.

Behind this, it may reflect Youjiu Games 'capital operation ideas of "full industry chain mergers and acquisitions": from game research and development, to game agency distribution, to e-sports and live broadcast platforms, to comprehensive portal leaders.

Youjiu

Games, the lead investor in Dragon Ball TV, announced yesterday that it will invest in Suzhou Youshi Network Technology Co., Ltd.(referred to as "Youshi") with its own funds and self-raised funds of 277.9461 million yuan, holding a total of 21% of its equity.

Data shows that PLU Game Entertainment Media ("Dragon Ball TV") is the core organization of YouTV. Since 2014, PLU's main business revenue, MAU(monthly active users) and the number of anchors have all shown steady growth.

Based on this calculation, Youshi (Dragon Ball TV) is valued at 1.32 billion yuan in this round of financing, with Youjiu Games being the leading investor. After the investment is completed, Dragon Ball TV founder Chen Qidong directly holds 8.36% of Dragon Ball TV, SoftBank holds 12.05%, Youjiu Games holds 21%, Youchuang Partnership holds 36.63%, and Tencent holds 20%.

Dragon Ball TV is the content producer of e-sports events in China and the unofficial organizer of e-sports events. In February 2015, Dragon Ball TV reached a strategic cooperation with game development and operation organizations Korea Professional E-sports Association (KeSPA), Game Storm, and NICE TV.

In terms of live broadcast lineup, Dragon Ball TV is equipped with mature and complete resources. It claims to have signed e-sports star Faker and all professional players from KeSPA's seven top giants. In addition, it has also signed domestic outstanding anchors such as Miss. The current game opponents are Douyu and others.

Therefore, Youjiu Games believes that Youshi is a domestic company that integrates game program production, live broadcast and on-demand platforms. Combined with years of experience in offline e-sports event production, operation and promotion, it has the ability and advantages to realize e-sports closure.

At present, Dragon Ball TV has formed four major sections: game programs, e-sports programs, personal live broadcasts and personal videos, and it is more competitive through diverse monetization channels through game intermodal transportation, virtual props, advertising sponsorship and peripheral products.

Or purchase Changyou's assets

Yesterday, Youjiu Games also issued an announcement on the progress of major asset restructuring, unveiling the mystery of the reorganization target for the first time.

The announcement stated that the company is communicating with Changyou.com(HK)Limited(Changyou Hong Kong Limited, a listed company on NASDAQ) on major transactions. Due to the dismantling of the overseas VIE structure and the acquisition of overseas operating assets, the asset scale is large and the procedures are relatively complex. Both parties are still demonstrating and communicating on matters such as transaction plans. In addition, Youjiu Games did not disclose more information.

Who is Changyou? In Newzoo's ranking of the world's highest-paid game companies in the first half of 2015, a total of three companies from China entered the list, namely Tencent ranked first, Netease ranked eighth and Changyou ranked 21st.

As of November 4, Changyou's share price was US$21.24, earnings per share of US$3.51, and a total market value of US$1.11 billion. On October 26, Changyou announced its unaudited third-quarter financial report as of September 30, 2015. Its total revenue for the third quarter was US$189 million, a year-on-year increase of 4%; non-GAAP net profit attributable to Changyou was US$78 million, compared with only US$3.3 million in the same period last year.

After Shanda and Giant were privatized one after another, in less than half a year, Perfect World, China Mobile Games, Taomi, Dream World and Renren, whose main revenue currently comes from games, also announced privatization. At present, Changyou is only one game company left in the China Stock Exchange.

Based on this, the market speculated that the cooperation between Youjiu Games and Changyou might be related to the latter's privatization. However, a senior game industry analyst told reporters,"Changyou has not yet suspended trading in the U.S. market, and the privatization transaction has a long cycle. Youjiu should not be planning this, but to acquire its assets."

Editor: vian