Shenzhen Stock Exchange inquired about Fuchun Communication and questioned the target company, Mochi Kaka, brushing orders.

on Tuesday, the Shenzhen Stock Exchange issued an inquiry letter about Fuchun Telecom's proposed purchase of 100% stake in Mochi Kaka for 1.05 billion yuan, focusing on the company's best-selling list and access to hundreds of millions of yuan of "running water" after its main game products were put into operation online. ask whether there are so-called "list brushing", "self-recharging" and other behaviors.

original title: Fuchun Communications plans to purchase mobile game assets asked by the Shenzhen Stock Exchange whether it "brushes the order"

the rationality of the company's valuation and performance commitment, the sustainability of its income and its dependence on a single game have always been the regulatory authorities' focus of inquiries on mergers and acquisitions of rival games. On Tuesday, the Shenzhen Stock Exchange issued an inquiry letter about Fuchun Telecom's proposed purchase of 100% stake in Mochi Kaka for 1.05 billion yuan, focusing on the company's best-selling list and access to hundreds of millions of yuan of "running water" after its main game products were put into operation online. ask whether there are so-called "list brushing", "self-recharging" and other behaviors.

according to industry insiders, as the main way to obtain mobile games, the daily updated best-seller list and download list such as Apple Store and Android market is undoubtedly one of the most intuitive selection criteria for consumers. However, this ranking mechanism has also spawned the so-called "list brushing" behavior. As for "self-recharge", game operators create fake running water by recharging their games, so as to achieve the so-called performance.

looking back at the restructuring plan disclosed by Fuchun Communications, the main game products of the target company Mochi Kaka include "the New Master", "Invyasha's Jade search Journey", "HD in the Heavenly Palace" and so on. After the launch of the above games, they all entered the Apple Store best-seller list and Google best-seller list. Among them, from its launch in December 2015 to June 2016, "New Master" has more than 3 million registered users and more than 200000 paying users, with a cumulative flow of more than 100 million yuan.

in its inquiry letter, Shenzhen Stock Exchange specifically asked Fuchun Communications to disclose whether there was a phenomenon of "self-recharge" and "brushing the list" of the target company, the shareholders of the target company, and the agent publishers of the game products related to the target company during the reporting period. If it exists, the relevant details, including time, amount and proportion, are required to be disclosed.

in addition to paying attention to whether the target company and its related parties take the behavior of "brushing the list" for the above-mentioned game products, the Shenzhen Stock Exchange also pays special attention to whether the target company carries out "self-recharge" and "brushing the list" with mobile game associations, mobile game merchants, testing companies and other subjects in the form of entrustment, consultancy, cooperation, etc.

in addition, the Shenzhen Stock Exchange is also concerned about why the monthly average flow, the number of players and the number of paying users of Mochka's "New Master" products are significantly higher than those of the other two games. Data show that the average monthly flow of "New Master" is 17.897 million yuan from the second to the seventh month after its launch, which is significantly higher than the monthly average of 3 to 4 million yuan for the other two games.

Shenzhen Stock Exchange also noted that in the course of operation of the above three games, operational indicators such as "new registered users", "monthly active users" and "operation pipelining" deviated from the data and the monthly downward trend in the previous period. The inquiry letter requires Fuchun Communications to explain the reasons for the reverse trend growth and analyze its rationality.

at the same time, the top three IP address areas of the cumulative registered players of the two games "New Master" and "HD" are Guangdong, Jiangsu and Zhejiang, and the proportion is very close. Shenzhen Stock Exchange requires Fuchun Communications to combine the regional distribution of IP addresses of accumulative registered players of other games during the reporting period of Mochi card, and the regional distribution of IP addresses of cumulative registered players of the same type of games in typical A-share game M & A cases, to explain the reasons and rationality of the similar regional distribution and proportion of IP addresses of registered players in the above two games.

the restructuring plan also disclosed that as of June 30 this year, the book value of the net assets of the underlying company was 19.7106 million yuan, its estimated value was 1.054 billion yuan, and the value-added rate reached 5246.60. For this situation, the Shenzhen Stock Exchange requires Fuchun Communications to disclose the rationality and basis of this estimate.

the financial data of the underlying company also show that it lost 2.7682 million yuan and 4.4181 million yuan respectively in 2014 and 2015, and achieved a net profit of 16.4689 million yuan from January to June 2016, and the other party promised that from 2016 to 2019, the non-net profit deducted by the target company is not less than 70 million yuan, 91 million yuan, 120 million yuan and 120 million yuan respectively.

based on this, the Shenzhen Stock Exchange requires Fuchun Communications to further disclose the main financial indicators of the underlying company from January to August this year, combined with the company's historical operating performance, reserve games, future new online games, and so on. explain the basis and realizability of the above performance commitments.

Shenzhen Stock Exchange also noted that Fuchun Communications compared this transaction with Palm fun Technology, Century Cruise, Caesar shares, Perfect World and other cases in the restructuring plan. In this regard, the inquiry letter requires the company to disclose the reasons for selecting the above eight cases as comparable cases. and the comparative analysis of the operating income, net profit, market share, popularity, number of issued and operated games, number of reserve games, and number of R & D personnel between the target company and the target company of these cases, so as to show whether it is comparable.

Edit: nancy