Ruichang Pictures Acquires 30% Stake in QQ XUANWU Game Operator for RMB 825 Million

Ruichang Pictures Acquires 30% Stake in QQ XUANWU Game Operator for RMB 825 MillionOn January 13, 2025, Ruichang Pictures (00136.HK) announced in a press release that it had signed a share transfer agreement with a subsidiary of Tencent Holdings to acquire a 30% stake in Beijing Yonghang Technology Co

Ruichang Pictures Acquires 30% Stake in QQ XUANWU Game Operator for RMB 825 Million

On January 13, 2025, Ruichang Pictures (00136.HK) announced in a press release that it had signed a share transfer agreement with a subsidiary of Tencent Holdings to acquire a 30% stake in Beijing Yonghang Technology Co., Ltd. The total transaction value is RMB 825 million, with RMB 742.5 million paid in cash and the remaining portion settled through the issuance of approximately 36.67 million consideration shares at HK$2.432 per share to Tencent or its designated party.

Beijing Yonghang Technology Co., Ltd. is a prominent game company under Tencent, with its core assets being the highly popular and long-running national-level games "QQ Xuanwu," "QQ Xuanwu 2," and the mobile version "QQ Xuanwu Mobile." These games boast a massive user base and enduring market influence, generating considerable revenue and profit for Tencent over the years. Ruichang Pictures' acquisition of a 30% stake in Beijing Yonghang Technology marks a significant step into the gaming industry and signals a broader expansion of its future development strategy.

For Ruichang Pictures, this acquisition not only secures the operating rights to the "QQ Xuanwu" series but also provides crucial access to the gaming market and valuable operational experience. Previously focusing primarily on film and television production and distribution, this acquisition facilitates diversification, opens new avenues for profit growth, and enhances overall market competitiveness. By integrating its resources in the film and television industry with Beijing Yonghang Technology's operational expertise, Ruichang Pictures aims to achieve significant success in the gaming sector. However, exploring synergistic effects and effectively integrating resources will be key areas of focus for Ruichang Pictures moving forward.

This acquisition also reflects a strategic adjustment by Tencent. While maintaining its dominant position in the gaming industry, Tencent is shifting its strategic focus towards other areas. The partial divestment may be part of Tencent's lighter asset operation strategy, reducing direct operational pressure and allowing for greater investment in research and development of emerging fields.

The acquisition also warrants attention regarding its impact on the gaming industry as a whole. The "QQ Xuanwu" series possesses a massive user base and strong brand recognition, offering valuable operational models for other game companies. Ruichang Pictures' involvement could introduce new operational strategies and development directions for the "QQ Xuanwu" series, further enhancing its market competitiveness and injecting new vitality into the overall gaming industry.

The RMB 825 million transaction represents a substantial investment in the gaming industry M&A landscape. This highlights the significant investment value still present in the gaming sector and its increasing attractiveness to various businesses. This substantial investment reflects the investor's confidence in the future prospects of the gaming market.

The RMB 825 million transaction value underscores the immense market value and sustained profitability of the "QQ Xuanwu" series. This reflects not only Ruichang Pictures' confidence in the gaming market's development but also its high recognition of the long-term potential of the "QQ Xuanwu" series. How Ruichang Pictures will operate this established game system, enhance user experience, and increase market share will be a key focus for the industry. The experience and resources gained through this acquisition lay a solid foundation for its future development in the gaming industry. This successful M&A case provides a valuable reference for other companies, further promoting the healthy and orderly development of the gaming industry.

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