Forgame to Acquire 55% Equity Interest in FinTech Platform Jianlicai
Acquisition Will Strengthen Forgame's Presence in the Fast-Growing FinTech Market
Acquisition Will Strengthen Forgame's Presence in the Fast-Growing FinTech Market
Publish Date:2017-06-26 source:Forgame
(Hong Kong, 26 Jun 2017) – Forgame Holdings Limited (“Forgame” or the “Group”) (stock code: 484), a leading developer and publisher of mobile games and webgames in the PRC, today announced it will acquire a 55% equity interest in Jianlicai (简理财)1, a leading FinTech platform in China, in consideration of the cancellation of the Convertible Bonds in the principal amount of RMB300 million. Following the completion of the transaction, Jianlicai will become a subsidiary of the Group and is expected to begin contributing revenue and profit to the Group. The acquisition of Jianlicai is meaningful to Forgame in the ways that:
- Jianlicai is a profitable business. The net profit of Jianlicai is RMB12million for the first two months in 2017 and the transaction has a profit guarantee of a net profit of RMB60 million adjusted for one-off and non-cash items for the full year 2017. Jianlicai has already recorded transaction volume of RMB29 billion for the full year 2016, representing approximately 6 times the transaction volume for the full year 2015.
- The valuation is attractive. According to the announcement, the acquisition of a 55% equity interest in Jianlicai for a consideration of RMB300 million implies a 9.1 PE multiple for 2017 earnings based on the profit guarantee, which is considered to be attractive in TMT industry.
- The financial products provided on Jianlicai platform are safe. All of the financial products on Jianlicai’s platform are from regulated financial asset exchanges and are subject to multiple risk controls from both Jianlicai and the financial asset exchanges to ensure the safety of the securities.
Jianlicai was founded and is led by Mr. Yang Zhang, a former Yahoo! and Alibaba executive with over ten years of experience in the internet sector. Mr. Zhang held a number of managerial positions in business units such as Yahoo! China, Taobao, Koubei.com, Alipay, Aliyun and Taobao Travel. He has been instrumental in expanding and strengthening Jianlicai’s business. As of June 25, 2017, Jianlicai had a total of 5.5 million registered users and had facilitated a cumulative total of RMB 53 billion in transactions.
With the aim of addressing the growing investment needs of mass investors in China, Jianlicai offers an online marketplace that offers financial products from regulated financial asset exchanges helping users manage their savings and assets in an easy way.
This acquisition fully aligns with Forgame’s growth strategy to create an inclusive financial ecosystem and become one of the most influential FintTech companies in China. The Group has obtained an online micro lending business license, an important milestone that marks its entrance into the FinTech market. With a scalable platform, a sticky customer base, proven business model, it’s expected that Jianlicai will dramatically speed up the development of Forgame’s FinTech business, create new synergies with the existing online micro lending business, and eventually increase shareholder value.
Note:1. Jianlicai (简理财) is an investment holding company incorporated in the Cayman Islands, and upon Completion through its wholly-owned subsidiaries and the Structured Contracts (primarily, Jianlicai Group), will be principally engaed in the internet financial business (also known as "科技金融") in the PRC through the operations of websites and mobile phone applications under the "Jianlicai" ("简理财") brands. Jianlicai is a subsidiary of Yinker Group.
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About Forgame Holdings Limited (stock code: 484)
Established in 2009 and listed on the Hong Kong Stock Exchange on 3 October 2013, Forgame Holdings Limited is a leading company of mobile games and webgames in China. Since its inception, Forgame has delivered hundreds of games to the China and overseas markets. Its game publishing platform 91wan has attracted over 200 million users cumulatively.
In December 2016, the Group prepared for the commencement of Internet Finance business by obtaining a license from the government to carry out internet micro-lending business in the PRC.
Safe Harbor Statements
This press release contains forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, Forgame’s limited operating history, its ability to develop and operate new games that are commercially successful, the growth of the online/mobile game market and the continuing market acceptance of its games and in-game items in China and elsewhere, its ability to protect intellectual property rights, its ability to respond to competitive pressure, its ability to maintain an effective system of internal control over financial reporting, changes of the regulatory environment in China, and economic slowdown in China and/or elsewhere. Forgame does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
- Jianlicai is a profitable business. The net profit of Jianlicai is RMB12million for the first two months in 2017 and the transaction has a profit guarantee of a net profit of RMB60 million adjusted for one-off and non-cash items for the full year 2017. Jianlicai has already recorded transaction volume of RMB29 billion for the full year 2016, representing approximately 6 times the transaction volume for the full year 2015.
- The valuation is attractive. According to the announcement, the acquisition of a 55% equity interest in Jianlicai for a consideration of RMB300 million implies a 9.1 PE multiple for 2017 earnings based on the profit guarantee, which is considered to be attractive in TMT industry.
- The financial products provided on Jianlicai platform are safe. All of the financial products on Jianlicai’s platform are from regulated financial asset exchanges and are subject to multiple risk controls from both Jianlicai and the financial asset exchanges to ensure the safety of the securities.
Jianlicai was founded and is led by Mr. Yang Zhang, a former Yahoo! and Alibaba executive with over ten years of experience in the internet sector. Mr. Zhang held a number of managerial positions in business units such as Yahoo! China, Taobao, Koubei.com, Alipay, Aliyun and Taobao Travel. He has been instrumental in expanding and strengthening Jianlicai’s business. As of June 25, 2017, Jianlicai had a total of 5.5 million registered users and had facilitated a cumulative total of RMB 53 billion in transactions.
With the aim of addressing the growing investment needs of mass investors in China, Jianlicai offers an online marketplace that offers financial products from regulated financial asset exchanges helping users manage their savings and assets in an easy way.
This acquisition fully aligns with Forgame’s growth strategy to create an inclusive financial ecosystem and become one of the most influential FintTech companies in China. The Group has obtained an online micro lending business license, an important milestone that marks its entrance into the FinTech market. With a scalable platform, a sticky customer base, proven business model, it’s expected that Jianlicai will dramatically speed up the development of Forgame’s FinTech business, create new synergies with the existing online micro lending business, and eventually increase shareholder value.
Note:1. Jianlicai (简理财) is an investment holding company incorporated in the Cayman Islands, and upon Completion through its wholly-owned subsidiaries and the Structured Contracts (primarily, Jianlicai Group), will be principally engaed in the internet financial business (also known as "科技金融") in the PRC through the operations of websites and mobile phone applications under the "Jianlicai" ("简理财") brands. Jianlicai is a subsidiary of Yinker Group.
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About Forgame Holdings Limited (stock code: 484)
Established in 2009 and listed on the Hong Kong Stock Exchange on 3 October 2013, Forgame Holdings Limited is a leading company of mobile games and webgames in China. Since its inception, Forgame has delivered hundreds of games to the China and overseas markets. Its game publishing platform 91wan has attracted over 200 million users cumulatively.
In December 2016, the Group prepared for the commencement of Internet Finance business by obtaining a license from the government to carry out internet micro-lending business in the PRC.
Safe Harbor Statements
This press release contains forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, Forgame’s limited operating history, its ability to develop and operate new games that are commercially successful, the growth of the online/mobile game market and the continuing market acceptance of its games and in-game items in China and elsewhere, its ability to protect intellectual property rights, its ability to respond to competitive pressure, its ability to maintain an effective system of internal control over financial reporting, changes of the regulatory environment in China, and economic slowdown in China and/or elsewhere. Forgame does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.