In the evening of December 9, Scenery Culture Industry Limited (600234) (“Scenery Culture” for short) issued an announcement that it intends to pay RMB360 million in cash to seven counterparties, which include Zhang Tao, WuyueTianxia, EGLS, Zhenshun Fund, HeliHongxuan, Kong Yi and Wang Haipeng, in order to purchase the 100% stake of Chengdu ZhangwoInfiniteScience&Technology Co., Ltd. (“ZhangwoInfinite” for short) by installment.
Through this announcement we can see that in the transaction Scenery Culture intends to purchase 100% of stock right of ZhangwoInfiniteby installment from seven equity holders, which include: Zhang Tao, WuyueTianxia, EGLS, Zhenshun Fund, HeliHongxuan, Kong Yi and Wang Haipeng. The target stock right will be purchased via two phases: the first-phase purchased part will include the 51% stake of ZhangwoInfinite; and the second-phase purchased part will be the remaining 49% stake of ZhangwoInfinite; the installment purchase will be implemented in the case that the net profit ofthe target company (ZhangwoInfinite) in January-June 2015 won’t be less than RMB15 million. Also, the seven counterparties of the transaction will make committees on the 2015-2017net earnings of ZhangwoInfinite after relevant auditing and evaluation procedures complete.
Chengdu ZhangwoInfinite Technology Co., Ltd. (“ZhangwoInfinite” for short) is located in Chengdu Tianfu Software Park (TSP). Founded in 2013, the company is mainly engaged in the development of online mobile games. With an excellent development team and superior mobile terminal gaming products, the company is a MMOARPG heavy mobile terminal game developer in China. It was reported that the games developed by ZhangwoInfinite are all MMOARPG mobile terminal games. Data shows that ZhangwoInfinite’s revenueprimarily comes from its core game, called "San Guo Zhan Shen” (“SGZS” for short; meaning “War Heroes of the Three Kingdoms"). SGZS was launched in June 2014, being known as the company’s first gaming product. As of the end of November, it had had a total of more than 3.5549 million registered players and a cumulative prepayment of RMB47.0968 million. As of September 30, 2014, ZhangwoInfinite had net assetsthat amounted to RMB8.5179 million; in January-September 2014, its operating income had reached RMB7.2606 million, and its net profit attributable to equity holders was already RMB2.6567 million.
ZhangwoInfinite’s team members, including its founder Mr. Zhang Tao, are all the former employees of some well-known Chinese gaming companies such as Kingsoft, The9 and 4399. Mr. Zhang Tao, the founder and CEO of ZhangwoInfinite, officially entered the online gaming industry in 2003 to assist and participate in the operational testing of a Kingsoft game, named "JX Online". Later, he was transferred to Kingsoft Online to be in charge of the network sale and prepayment of game cards. He subsequently worked and ventured atseveral gaming companies, such as Bbmao, Dozen, Duowan.com, Zhuhai DreamWorks.
It was reported that since its inception, ZhangwoInfinite has never lacked the favor of capital. Within just one year after its establishment, the company has subsequently won angel investment from well-known angel investor Mr. Xu Xiaoping and also a joint A round investment from two venture capital firms: WuyueTianxia and Heli Capital. On April 3, 2014, the company also receivedheavy strategic investment from well-known venture capital firm, EGLS. This is the third financing of the company within one year after its establishment. With this, the company has also achieved the fastest financing speed among other mobile gaming R&D teams in Chengdu.
Since it was officially put into operation in 2005, Chengdu Tianfu Software Park (TSP) (the location of ZhangwoInfinite) has become home to nearly 500 well-known domestic and international companies, including IBM, EMC, Huawei, Tencent, Alibaba, Nokia and Siemens. Meanwhile, in order to cultivate more local innovative enterprises, the Tianfu Software Park's Internet incubator – Startup Center - has been committed tobusiness incubation in the field of mobile Internet in recent years and has already incubated nearly 600 startup teams. Currently, the Startup Center is home to over 150 startup teams. It has given birth to more than 20 well-known Internet companies, including the likes ofLudashi, Tap4fun and PinGuo Tech.
Due to its industrial agglomeration effect and excellent industrial environment, TSP has attracted massive investment from venture capital firms. According to a September 2014 report, in the past two years there have been nearly 20 Chengdu-developed mobile games , which have a monthly income of over RMB10 million. TSP-based companies developed 80% of such games. Moreover, TSP-based enterprises have also had eye-catching performances in attracting investments: Chengdu PalmJoys Technology Co., Ltd. and Chengdu Haowan123 Technology Co., Ltd. have each received about RMB90 million in investment, which creates a record in the amount of investment gained in Chengdu’s gaming industry; in early 2014, Chengdu-based HFTSoft gotthe A round investment of US$10 million from Morningside Ventures; in November 2014, as the largest sports social platform and wearable device data platform service provider in China, Coddon, a TSP-based company, completed the US$30 million B round of financing after getting a US$10 million A round of investment in March 2014, setting a new record in Chengdu Internet companies’ financing. Today, Chengdu Tianfu Software Park has become a veritable treasured place in southwest China’s entrepreneurial circle.