Century Huatong to Buy Shengyue Network for USD4.35 Billion – Yicai Global

What happened: On September 12, Zhejiang Century Huatong, a Shenzhen-listed gaming ecosystem building company, revealed its draft plan to purchase 100% stake of Shenyue Network, the online gaming affiliate of former Nasdaq-listed Shanda Games. The value of the deal is estimated at RMB 29.8 billion ($4.4 billion). Shengyue Network’s operating income from Shanda Games was RMB 4.19 billion and net profit was RMB1.5 billion last year. Zhejiang Century Huatong has suspended public stock trading.

Why it’s important: As China’s gaming industry faces pressure from both government and market, business owners are eagerly seeking proper deals to optimize asset structures and operation. Zhejiang Century Huatong, a lesser-known company to people not familiar with China’s gaming industry, is taking the chance to acquire more resources. However, there is no guarantee that the big deal will bring positive results. Calculating from fiscal results audited for 2017 annual reports, the average net profit of family entertainment and software (including games) A-share companies declined 233.42% year-over-year to RMB 494 million.

Runhua Zhao

Runhua Zhao is a technology reporter based in Beijing. Connect with her via email: runhuazhao@technode.com

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