Recently, Giant Network Group Co.Ltd(002558) ( Giant Network Group Co.Ltd(002558) , SZ; previous closing price of 9.97 yuan) announced that it had received a letter from jukun network, its shareholding subsidiary, to sell its shares in playtika holding Corp. (NASDAQ: pltk, hereinafter referred to as “playtika”). According to the announcement, if the potential transaction is completed and leads jukun network to sell all or part of its indirectly held playtika shares, it may have a significant positive impact on the company’s financial condition and operating performance.
The news of the planned sale of playtika’s equity has finally brought the end to Giant Network Group Co.Ltd(002558) this six-year “obsession”. The reporter of the daily economic news noted that since 2016, Giant Network Group Co.Ltd(002558) has repeatedly tried to integrate playtika into the system of listed companies through restructuring, capital increase and even share donation, but it has not been realized.
The company plans to sell the equity of playtika, and Giant Network Group Co.Ltd(002558) plans to recover the equity. The latest announcement of Giant Network Group Co.Ltd(002558) on March 17 shows that the company plans to repurchase shares of no less than 300 million yuan and no more than 600 million yuan for the company’s employee stock ownership plan or equity incentive plan.
With playtika successfully ringing the bell on NASDAQ and gradually bringing benefits, Giant Network Group Co.Ltd(002558) why suddenly sell playtika? Can this PC Game giant return to its heyday with the new story of metauniverse?
The reporter of the daily economic news contacted Giant Network Group Co.Ltd(002558) for details, and the other party said that the announcement shall prevail.
chasing playtika for 6 years
According to playtika’s previous announcement, “in order to maximize shareholder value, its board of directors has begun to evaluate playtika’s potential strategic options. As part of this process, the board intends to consider a full range of strategic options, which may include the overall sale of the company or other possible transactions (hereinafter referred to as potential transactions).”
It is reported that at present, the evaluation procedure of potential transaction has been started. Playika holding UK II Limited indirectly controlled by jukun network, as the controlling shareholder of playika, is one of the participants in the potential transaction. According to the 13D document, as of February 25, 2022, the proportion of equity held by the platform in playtika is 51.8%.
In fact, the origin of Giant Network Group Co.Ltd(002558) and playtika dates back to 2016. At that time, Giant Network Group Co.Ltd(002558) had just landed A-Shares through backdoor. Playtika, an Israeli mobile game manufacturer founded in 2010, won the favor of Giant Network Group Co.Ltd(002558) by virtue of gambling and leisure chess and card social mobile games.
Giant Network Group Co.Ltd(002558) relevant announcements show that in 2016 Giant Network Group Co.Ltd(002558) plans to acquire playtika, a subsidiary of Caesar entertainment, with us $4.4 billion in cash However, the acquisition in 2016 ended in failure. In the following years, Giant Network Group Co.Ltd(002558) also promoted major asset restructuring and acquisition of playtika for many times, but failed.
Acquisitions were frequently blocked, and Giant Network Group Co.Ltd(002558) adopted “circuitous tactics”. In 2020, Giant Network Group Co.Ltd(002558) announced that jukun network, a joint-stock subsidiary, completed the acquisition of Chongqing Cibi through capital increase. Jukun network owns 100% equity of Chongqing Cibi and indirectly controls playtika.
A year later, with playtika listed on Nasdaq, Giant Network Group Co.Ltd(002558) controlling shareholder giant investment once again wanted to include playtika in the listed company by means of share donation. However, after the exchange issued a letter of concern, Giant Network Group Co.Ltd(002558) chose to terminate the share donation plan.
“Previously Giant Network Group Co.Ltd(002558) has always wanted to include playtika in the listed company, because playtika has a place in leisure chess and card social mobile games, which can bring further development to Giant Network Group Co.Ltd(002558) in the field of mobile games.” Zhang Shule, an analyst of the game industry, said in an interview with the reporter of the daily economic news that Giant Network Group Co.Ltd(002558) once seized the bonus of the PC end and enjoyed the best scenery with the phenomenal game journey. However, with the advent of the era of mobile games, Giant Network Group Co.Ltd(002558) it is difficult to see new popular mobile games.
Playtika’s latest financial report shows that playtika’s total operating revenue in 2021 was US $2.583 billion, a year-on-year increase of 8.92%; Net profit after deduction of non attributable assets was US $308 million, with a year-on-year increase of 234.96%. So far, the company has about 24 games, of which the leisure category accounts for 48.7% of the total revenue and the gambling category accounts for 51.3%.
aim at the “new direction” of metauniverse game
Giant Network Group Co.Ltd(002558) wanted to give up playtika, and there was a lot of discussion in the industry.
In Zhang Shule’s opinion, Giant Network Group Co.Ltd(002558) now the choice is to put down the “chicken ribs” and concentrate their own energy and funds to bet on the new track. After all, its capital and strength are not suitable for multi line combat at present.
\u3000\u3000 ” Giant Network Group Co.Ltd(002558) although it has controlled playtika in various ways, it has no way to merge and consolidate it; secondly, playtika does perform well in revenue and popular games, but under the supervision of China, it is difficult for chess and card games to have a huge increase in market share in the future. Instead of dragging on like this, it is better to sell blood back when the price is good. At the same time, Giant Network Group Co.Ltd(002558) is looking for a new track, which requires more energy and capital Input. ” Zhang Shule explained.
The reporter of “daily economic news” noted that the “old gun” Giant Network Group Co.Ltd(002558) , which used to be a popular game in the end game era, is facing the challenge and test of breaking through the bottleneck of performance growth and finding a new track under the fierce competition in the mobile game era.
According to the data, from 2017 to 2020, Giant Network Group Co.Ltd(002558) revenue was 2.907 billion yuan, 3.78 billion yuan, 2.57 billion yuan and 2.217 billion yuan respectively, with a year-on-year increase of 25.10%, 30.03%, – 31.96% and – 13.77%; The net profits attributable to the owners of the parent company were 1.290 billion yuan, 1.078 billion yuan, 820 million yuan and 1.029 billion yuan respectively, with a year-on-year increase of 20.71%, – 16.44%, – 23.94% and 25.48%.
From the revenue data, the overall performance of Giant Network Group Co.Ltd(002558) in 2020 has improved. In the 2020 annual report, Giant Network Group Co.Ltd(002558) also said that in order to face long-term development and focus on core business, the company sold some businesses with low relevance to key game tracks.
However, in terms of popular game products, two old games, journey and ball battle, are still the main revenue force. In 2012, Giant Network Group Co.Ltd(002558) also tried to expand the game sector through acquisition. At that time, Giant Network Group Co.Ltd(002558) planned to acquire 72.81% equity of Taomi group and bring “Moore Manor” under his command, but it ended in nothing.
“The company’s performance in operating games is stable, and the new games” original journey “and” dragon and the end of the world “, which are expected to be launched this year, have obtained the version number; in addition, the company is constantly expanding the development opportunities of overseas game market.” Giant Network Group Co.Ltd(002558) scale.
Focusing on the main business of the game, the popular metauniverse may become the next new track for Giant Network Group Co.Ltd(002558) betting.
Two days ago, Giant Network Group Co.Ltd(002558) said on the investor interaction platform: “metauniverse is generally regarded as the form of the next generation Internet. The company attaches great importance to the trend of metauniverse and the opportunities it brings to the game industry. After preliminary research and demonstration, the company has determined metauniverse game as one of the directions of long-term layout. The company will set up a technical team to explore it step by step.”
