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Tianshen Hudong to Backdoor List on Shenzhen Exchange

Shenzhen Stock Exchange, 1/14/14

Dalian-based wood floor manufacturer Kemian Wood Industry (002354.SZ) has announced that the company has entered into a share and asset swap agreement with Beijing-based mobile and browser game developer Tianshen Hudong Technology through which Tianshen will list on the Shenzhen Stock Exchange by way of introduction. Following restructuring of Kemian and completion of the deal, Tianshen's listed valuation is expected to reach RMB 2.45 bln, 269.2% greater than Kemian's total audited asset value of RMB 910.17 mln as of the end of 2012. Tianshen CEO Zhu Ye and Deputy GM and Board Member Shi Botao will together hold a controlling stake in the company.

Zhu will be the company's largest shareholder with a 38.8% stake, while Shi will hold a 22.2% stake, and Liu Hengli, a technology director and Deputy GM, will hold 5.4%. Tianshen Board Member Shi Yu will hold a 4.8% stake, Zhang Chunping, also a technology director and board member, will hold 2.4%, while Zhu's wife, Shang Hua, will control 2%.

Chinese television production company Enlight Media (300251.SZ) will hold a stake of over 5% in the company.

All of the shareholders will be subject to a share lockup period ranging from 12 to 36 months. Tianshen must achieve agreed upon profit targets before the restrictions are lifted.

Tianshen Hudong posted net profits of RMB 119 mln and RMB 138 mln in 2012 and 2013, respectively. The company expects to record net profits of RMB 186 mln, RMB 242 mln, and RMB 303 mln in 2014, 2015, and 2016, respectively.

Editor's Note: For more information on this topic, please see "Enlight Media Takes 10% in Browser Game Firm Tianshen Hudong," MD 8/25/12 issue.

Keywords: Shi Botao listing Liu Hengli Shi Yu Zhang Chunping Shang Hua browser game Internet profit Enlight Media Zhu Ye 300251.SZ Tianshen Hudong bourse online gaming

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