Panax Notoginseng Mutual Entertainment plans to raise 1.4 billion to acquire the remaining 20% stake in Aurora Network.

data show that Aurora Network, founded in October 2013, is a research and development subsidiary of Panax Notoginseng Mutual Entertainment. The company has successfully developed a number of page gaming products, including Archangel Sword and legendary overlord.

Financial data show that by the end of June 2017, Jiangsu Aurora Network had total assets of 667 million yuan and net assets of 365 million yuan. In the first half of this year, the company achieved an operating income of 503 million yuan, an increase of 66.56% compared with 302 million yuan in the same period last year, and a net profit of 348 million yuan in the first half of this year, an increase of 89.13% compared with 184 million yuan in the same period last year.

counterparty Hu Yuhang promised that the net profit attributed to the parent company by Jiangsu Aurora Network deduction in 2017-2019 would not be less than 580 million yuan, 725 million yuan and 870 million yuan respectively, that is, the cumulative net profit of three years would be 2.175 billion yuan.

< strong > the revenue of mobile games has increased, while page games have declined < / strong >

it is worth noting that 20% of the transaction consideration for this acquisition of Jiangsu Aurora Network is paid in cash, which will undoubtedly have a greater impact on the cash flow of Panax notoginseng mutual entertainment. To this end, on the evening of September 4, Sanqi Mutual Entertainment also disclosed a "public offering of convertible corporate bonds" to raise funds for the acquisition, and the acquisition is subject to the approval of the CSRC.

according to the plan, Panax notoginseng Mutual Entertainment plans to issue convertible bonds to raise no more than 2.1 billion yuan. Of which 1.4 billion yuan is used for the aforementioned acquisition, and the remaining funds are used for the construction project of the global distribution and operation of online games, big data system upgrade and IP reserve project and replenish the working capital.

while adding code to the game, Panax notoginseng mutual entertainment itself has also performed well. According to the company's semi-annual report released on August 31, in the first half of this year, the company achieved operating income of 3.079 billion yuan, an increase of 26.8 percent over the same period last year; the net profit belonging to shareholders of listed companies was 851 million yuan, up 75 percent from the same period last year; and the net profit after deducting non-profit was 759 million yuan, an increase of 68.72 percent over the same period last year.

among them, the company's mobile game business achieved an operating income of 1.543 billion yuan and a gross profit of 1.2 billion yuan in the first half of the year, an increase of 19.6% and 506% respectively over the same period last year. However, although the online game business remained the second place in the industry after Tencent in the first half of the year, its revenue declined compared with the same period in 2016 due to the influence of user habits and reduced user size and R & D investment.

with regard to the future development of web games, Sanqi Mutual Entertainment said at a conference call with institutional investors on August 31 that the company's web games did decline a little in the first half of this year, but at the same time the company's market share was second only to Tencent and remained second to Tencent, and far above the level of third place in the market. Key products will be launched one after another in the second half of the year, and it is expected that the second half of the year will bring vitality and confidence to the entire page game market.

Edit: xiongwei