Zhongqingbao plans to acquire assets of 1.2 billion yuan last year with a loss of 90 million yuan to revitalize its performance

In fact, in recent years, listed companies in the game industry have made frequent mergers and acquisitions. In addition to Zhongqingbao, in June alone, companies such as Shunwang Technology and Tianshen Entertainment announced fixed increase plans. Among them, Shunwang Technology plans to raise 2 billion yuan to acquire related companies to establish a pan-entertainment operation platform, while Tianshen Entertainment plans to acquire equity in game companies for 3.676 billion yuan.

Original title: Game listed companies are launching a new wave of mergers and acquisitions. Zhongqingbao plans to acquire assets for 1.2 billion yuan.

On the evening of June 7, Zhongqingbao issued an announcement stating that it plans to acquire information technology assets with a transaction amount of no more than 1.2 billion yuan. The transaction method is initially planned to acquire assets in a manner that includes but is not limited to cash or cash plus equity. The specific transaction method must be finally confirmed based on the results of transaction negotiations. The company's shares have been suspended since the market opened on June 8.

In fact, in recent years, listed companies in the game industry have made frequent mergers and acquisitions. In addition to Zhongqingbao, in June alone, companies such as Shunwang Technology and Tianshen Entertainment announced fixed increase plans. Among them, Shunwang Technology plans to raise 2 billion yuan to acquire related companies to establish a pan-entertainment operation platform, while Tianshen Entertainment plans to acquire equity in game companies for 3.676 billion yuan.

According to the first quarterly report previously released by Zhongqing Bao, the company achieved revenue of 62.39 million yuan in the first quarter, a year-on-year decrease of 6.10%, and net profit attributable to shareholders of listed companies was 3.46 million yuan, a year-on-year decrease of 42.82%.

Regarding the decline in performance, Zhongqingbao said that the company's client games and mobile games are in an alternate between old and new, and the scale effect of the revenue brought by new games has not been apparent; based on the overall consideration of the market environment, the launch of the company's new products to the market has been delayed, and sales revenue has not been realized during the reporting period; the interest expense on working capital borrowings has been reduced during the reporting period compared with the same period last year. As of March 31, 2016, the amount of non-recurring gains and losses during the reporting period was approximately 2.7 million yuan, which also had a certain impact on net profit.

In 2015, the company achieved operating income of 343 million yuan, a year-on-year decrease of 29.9%; achieved operating profit of-91 million yuan, a year-on-year decrease of 393.7%; and achieved a net profit attributable to the parent company of 65 million yuan, turning losses into profits year-on-year. However, due to the unfulfilled performance commitments of subsidiaries Shanghai Meifeng and Shenzhen Sumo, the company accrued goodwill impairment of 187 million yuan, which seriously dragged down the company's performance.

In this regard, a research report from a brokerage firm believes that with the company's significant impairment of goodwill in 2015, Zhongqingbao may be able to carry out operations with ease in 2016. The transition between new and old games will basically be completed in 2015, and game revenue may rebound in 2016. The company will focus on mobile Internet development in the future. Currently, the company has sufficient cash flow and is in the best state in history. In 2016, the company plans to reserve IP resources and launch high-quality mobile games; lay out the upstream of the industrial chain, expand the field of film and television culture and pan-entertainment, and realize audio-visual two-wheel drive. Through the horizontal layout of pan-entertainment, the company is expected to return to the track of rapid development.

In addition, some industry insiders pointed out that Zhongqingbao adheres to the strategy of four-pronged games, web games, mobile games and social games, interspersing with overseas vertical lines. Games such as "The Last Gun","Legend of the Night", and "Battle of the Three Kingdoms" developed by the company have achieved good market response. In terms of overseas markets, the company has launched several products in North America, Russia, Taiwan and other regions, and achieved certain results. The company's R & D strength is at the top level in China and is rated as one of the world's top developers by Google Play. In the future, the company is expected to actively explore the application of new technologies in the company's business by laying out the game market in subdivided fields, carrying out industrial chain cooperation and platform layout, or gaining surpassing advantages in market competition.

This acquisition is obviously one of the company's measures to revitalize its performance.

Editor: Nancy