The Battle of the Red Sea

Absrtact: Why so expensive? Jiede A-share nine big game mergers and acquisitions This is a game about games, broke out so suddenly, but the performance is so strong-traditional media, communications and technology companies to break the door, the capital players and gamers, the market to do

Why is it so expensive?

Jiede A-share nine game merger case

This is a game on the "game", broke out so suddenly, but the performance is so strong-traditional media, communications and technology companies to break the door, the capital players and gamers, the market long enthusiasm seems endless.

Yesterday, the Shanghai stock index is calm, a-shares still have three hand tour concept shares sealed in the trading; After a short two weeks of announcements, in green Bao, Phoenix Media, Shenzhou Thai Yue, days boat culture four companies five game company mergers and acquisitions cases.

By taking stock of the nine-dollar game mergers and acquisitions over the past year, the Shanghai news reporter tried to explore the inner aspect and future trend of the "valuation game".

Risk of valuation emerging

The Shanghai news reporter has counted the cases of game mergers and acquisitions in the A-share market since May 2012, a total of 9 (Zhejiang Newspaper Media, in the two mergers and acquisitions of two objects), according to the time series are: Zhejiang newspaper media 3.2 billion to buy Hangzhou winger, Shanghai Hao side of the 100% equity; Bo Rui Spread 1.036 billion acquisition of Roaming Valley 70% Equity, Palm fun technology 810 million acquisition of mobile network Pioneer 100% Equity, Datang Telecom 1.699 billion acquisition to play Entertainment 100% Equity, Huayi Brothers 672 million acquisition of Silverside Technology 50.88% Equity, the Chinese green treasure a total of 444 million acquisition of Soma Technology, the United States peak Digital 51 % stock rights, Phoenix Media 310 million acquisition of Mu and network 64% equity, Shenzhou Tai Yue 1.215 billion acquisition of Tianjin Shell 100% Equity, tin Zhou culture 1.254 billion acquisition of the magical Times 100% equity.

How to value gaming companies is a problem and focus. Because the game enterprise is the typical light asset company, the industry characteristic determines that its net worth cannot cover its core technology, the brand superiority, the business network, the user resources and the innovation service ability value, therefore usually uses the income method appraisal. Based on the valuation and commitment of the acquisition of the value of the 2013-year performance ratio of the formation of the price-earnings ratio of the approximate analysis, the acquisition of Soma Technology in the 6.84 times times the lowest, Phoenix Media acquisition and network of 9.17 times times the second, Bo Rui spread the acquisition of Roaming Valley 9.49 times times valuation again. This is the only case where nine of mergers and acquisitions are valued at 10 times times. Since then, the acquisition of the United States and China's peak digital valuation up to 15.6 times times, the days of the magical era of cultural acquisition of the value of the time is also up to 14.6 times times. The hardest thing to reassure is Datang Telecom's acquisition of entertainment, which did not disclose the exact figures for earnings forecasts.

Shanghai News reporter noted that many mergers and acquisitions case valuation risk has been gradually emerging. such as Datang Telecom to play the acquisition of entertainment value of 1.699 billion, and only half a year ago in November 2012 Haitong Kaiyuan shares to play the value of entertainment is only 640 million yuan, half a year value-added 1.059 billion yuan, value-added rate of up to 165.47%; and then as the acquisition of Soma Technology, In the context of the explosive growth of the entire hand-travel industry, the first half net profit was 14.777 million, only last year net profit of 43.198 million of 34%; Looking at the new China Thai Yue August 23 announced the acquisition of Tianjin Wood, the establishment of less than one year, the report period of income mainly from the "small Empire" a game, There is no optimism that the 12.3 times-fold valuation can be propped up.

There are also insiders told reporters that to hand tour company valuation can not be overlooked content from the game product flow, the past product rankings, the number of games in the research industry, such as the evaluation of information, but in the disclosure of the acquisition report did not get the above data, so how to valuation, whether reasonable, difficult to generalize.

Project design

Reporters at the same time noted that in the merger plan and fund-raising methods, nine cases also have a look. The vast majority of mergers and acquisitions took the issue of equity plus cash payments supporting the way, but also the Phoenix media, such as the book funds abundant "tycoon" to use a subsidiary to subscribe to the new registered capital of the practice is easy to put in place, or if the original investment project funds to use.

Many mergers and acquisitions, in order to stimulate the acquisition of the initiative of the party design. such as Zhejiang newspaper media on the Hangzhou winger, Shanghai Hao side of the acquisition, let the company's core management team members to form a jubilee investment and pledged to subscribe to no less than 4% of the total amount of shares, thereby locking part of the equity; If the net profit of 2014 years of Roaming Valley is less than 120 million, it is the right to choose whether to continue the subsequent 30% transaction. At the same time limit the remaining stock price is not higher than 430 million; Huayi Brothers to Silverside Technology acquisition is more special, not to the management of the stake in the scope of acquisition, but the promise of silverside technology three years to achieve a net profit of more than 351 million, the company will be 2015 years net profit of 10 times times the valuation of

In addition to the above nine mergers and acquisitions companies, some companies have not bought game companies, such as the RONGMA information on valuation issues and the north latitude to increase investment in big-hand travel, but they cannot be defined as losers in the game. Reporters in the recent industry meeting was informed that northern Latitude communications under its wholly-owned subsidiary Honeycomb game as a game agent for game developers to advance the game money, if no company has just thrown 500 million yuan financing to increase the hands of the move to invest, the company also difficult to make such a commitment.

In the hands of the "Red Sea" dispute, who is the beach-goers, who are naked swimmers, can only wait to see.