Giant Network is selling its 30% stake in Hefei Lingxi Interactive Network to Shanghai Zhuoxian for ¥142.5 million, as part of a strategic focus on core gaming operations.

Target Company Overview

In a strategic move to focus on its core gaming businesses, Giant Network has announced the sale of its 30% stake in Hefei Lingxi Interactive Network Technology Co., Ltd. (Hefei Lingxi) to Shanghai Zhuoxian Interactive Network Technology Co., Ltd. for ¥142.5 million. This follows an earlier deal on September 7th, where a 70% stake was sold for ¥332.5 million. Founded on January 22, 2017, Hefei Lingxi has been integral to Giant Network's expansion into the board game sector, which has yielded notable profits since its acquisition in 2018.

Despite strong performance indicators, Giant Network expressed that Hefei Lingxi's operations did not align closely with their primary focus areas. The company had been generating significant income from Hefei Lingxi, with reported revenues from ¥138 million in 2018 to ¥153 million in 2019, and by mid-2020, profits had peaked at ¥101 million.

Industry Overview in China

The Chinese gaming industry has witnessed rapid growth, especially in mobile and online gaming sectors, driven by the increasing consumer demand for interactive entertainment. With a m