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Finance Firm 'Baocheng' to Acquire Game and Film Companies

Baocheng Investment, 1/12/15

Chinese capital management firm Baocheng Investment (600892.SH) has announced plans to raise nearly RMB 2.5 bln to acquire Shenzhen-based online game developer Taole Network Technology and Beijing-based film studio Zhonglian Chuandong (Vision Power). After the acquisition is completed, Baocheng's primary business will shift towards development and operation of online games, and film production.

Taole Network Technology reported net profits of RMB 38.03 mln and RMB 43.54 mln for 2013 and the first 11 months of 2014, respectively. As part of the transaction, Taole has guaranteed that its net profit will reach RMB 65 mln, RMB 84.5 mln and RMB 110 mln for 2015-2017. Vision Power has committed to earning net profit of at least RMB 75 mln, RMB 101 mln and RMB 137 mln for the same time period.

Taole, founded at the end of 2009, is involved in game development, publishing, and operation on multiple platforms including mobile and PC-client games. Most of Taole's founding members previously worked at either Chinese firms Tencent (0700.HK) or NetEase (Nasdaq: NTES), and are well experienced in the online gaming industry.

Taole's majority shareholder is Jason Zeng (Zeng Liqing), who is one of the founders of Tencent, with a 43.62% stake in Taole (before completion of the sale to Baocheng).

Keywords: online gaming mobile gaming film production Baocheng 600892.SH Jason Zeng film Internet profit Taole M&A


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