Heroes amuse each other “repeatedly defeated and repeatedly fought” to attack the selection layer after backdoor failure

On December 31, 2020, hero mutual Entertainment Technology Co., Ltd. (hereinafter referred to as “hero mutual entertainment”, 430127. OC), the first share of mobile e-sports, announced that the company plans to issue shares to unspecified qualified investors and list on the selection layer, and has recently submitted relevant guidance and filing materials to the CSRC. < / P > < p > the announcement shows that hero mutual entertainment is currently an innovative company in the new third board, and has been listed for 12 consecutive months. It closed on December 29, 2020, with a market value of 5.54 billion yuan. The market value of the public offering is expected to be no less than 1.5 billion yuan. < / P > < p > “recently, we are preparing to be listed on the select tier of the new third board.” Hero mutual entertainment securities department to the “China Business Daily” reporter said. As for the purpose of raising 1.5 billion yuan through public offering, it said: “the company will hold another board meeting (discussion and decision) in the future for the specific scheme. At present, it only makes a prompt announcement first.” < / P > < p > it is worth noting that in 2018 and 2019, hero mutual entertainment successively planned IPO, backdoor listing and other ways to rush the capital market, but all failed. This time, it is still uncertain whether its switch to the selection layer will succeed. < / P > < p > according to the public information, as early as 2018, hero mutual entertainment launched the IPO plan, but failed in the end. Since then, in 2019, hero mutual entertainment has successively announced the “backdoor” of Hermes group and Dongjing electronics, but they all died in vain. At present, Ying Shuling, the founder of hero mutual entertainment, holds 30.5% equity of hero mutual entertainment through Dino investment. Ying Shuling is acting in concert with “Dino brothers”, which currently holds 6.1% equity of hero mutual entertainment. < / P > < p > at the same time, Huayi Brothers (300027. SZ) and Beijing Sequoia Xinyuan equity investment center (limited partnership) also appeared in the list of top ten shareholders of hero mutual entertainment, ranking the second and fourth largest shareholders, with shareholding ratios of 20.1% and 6.9% respectively. < / P > < p > since 2015, hero mutual Entertainment’s main business is divided into two parts: mobile game R & D and mobile game distribution, in which the revenue of game distribution over the years accounts for more than 2 / 3. Take the financial data of the latest 2020 semi annual report as an example, the current revenue of hero mutual entertainment is 870 million yuan, and the revenue of game distribution and R & D is 720 million yuan and 150 million yuan, respectively, accounting for 83% and 17% of the total revenue. < / P > < p > according to the annual report of China’s game industry in 2019 released by Gamma data, the actual sales revenue of China’s game market in 2019 reached 233 billion yuan, an increase of 8.7% year on year. Among them, the mobile game market revenue reached 151.3 billion yuan, a year-on-year increase of 13%, accounting for about 65% in the whole game field. < / P > < p > and hero entertainment is known as “the first share of mobile E-sports”. Hero mutual entertainment has also repeatedly said that the company adheres to the operation mode of integrating research and operation, focusing on the R & D and distribution of mobile games; the company has a complete business system, independent intellectual property rights and independent technology development team, and its business does not depend on the controlling shareholders and other related enterprises, and has the ability to directly face the market and operate independently. < / P > < p > according to the 2019 annual report of hero mutual entertainment, the company continues to expand the category of mobile games. At present, the company’s self-developed or agent released games include more than ten games, such as “Zhan Shuang pamish”, “New Three Kingdoms”, “national gun battle 2”, “dance together”, “peak tank: Armored battle song”, “ace War: Code Hero”; the new online games in 2019 include “Zhan Shuang pamish”《 Three Kingdoms war m, flower love elimination, war and conquest, green journey, etc. < / P > < p > in terms of channels, hero mutual entertainment said that in the process of mobile game R & D and operation, the company has always attached importance to the cooperation with important game platforms at home and abroad, and has established good cooperative relations with Appstore, hard core alliance, application treasure, Ali game, duoku game, 360 game, Xiaomi mutual entertainment, etc. < / P > < p > in 2019, the top three customers of hero mutual entertainment are Apple Inc., Google Inc. and Huawei Software Technology Co., Ltd., with sales of 480 million yuan, 170 million yuan and 80 million yuan respectively, accounting for 53% of the total revenue. < / P > < p > financial data show that from 2015 to 2016, the performance of hero mutual entertainment increased significantly, the revenue increased from 110 million yuan to 940 million yuan, and the net profit deducted from non return to parent increased from nearly 20 million yuan to 530 million yuan, an increase of nearly 30 times. < / P > < p > since 2017, the revenue of hero mutual entertainment has continued to grow, and has increased to 1.37 billion yuan by 2019. However, the net profit of non parent company began to turn around and declined year by year. From 2017 to 2019, the non return net profit of hero mutual entertainment deduction was RMB 400 million, RMB 350 million and RMB 60 million respectively, with year-on-year growth rates of – 25%, – 12% and – 84% respectively. < p > < p > similarly, the semi annual report of hero mutual entertainment in 2020 shows that its current revenue is 870 million yuan, a year-on-year increase of 37%; its net profit after deduction is 130 million yuan, a decrease of 8% compared with 140 million yuan in the first half of 2019. < / P > < p > in recent years, the decline of net profit of hero mutual entertainment after deducting non returnable assets may be related to industry policies. Hero mutual entertainment said in its 2018 annual report that due to the reform of industry management organization, the release of new domestic game titles was suspended from March to December 2018, which had a certain impact on the company’s online operation of new games that year. < p > < p > in terms of hero mutual entertainment, online games are an emerging Internet industry, which is under the joint supervision of the State Administration of press, publication, radio, film and television and the State Copyright Administration. With the rapid development of the game industry, the above departments have introduced a series of management systems to strengthen the supervision of game content and business activities, and strengthen the examination of online game enterprises and product quality through administrative licensing, product pre-approval, and subsequent operation supervision. < / P > < p > since then, although the release of game titles has been restarted and the net profit of hero entertainment deduction is not returned to the parent, it has not recovered the growth trend before 2018. Some analysts pointed out that, although the distribution of game titles has been restarted in 2019, the impact of policies on the industry has not been eliminated, resulting in the performance of some game star companies eclipsed, and nearly half of the game companies’ performance declined in the first half of that year. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.