Fintech
Hong Kong-based Gome FinTech marks diversification by acquiring Chinese game developer CashBox for $25.6 million
Hong Kong-based financial services platform Gome Finance Technology (Gome Fintech) has unveiled plans to acquire Chinese game developer and publisher CashBox Group Technology for HK$200 million ($25.6 million) as part of strategic diversification.
Gome Fintech’s core businesses include trade factoring, finance leasing, real estate mortgage lending and money lending businesses in the Hong Kong region, and the acquisition will mark its entry into the artificial intelligence-generated content (AIGC) business.
According to a document filed by Gome Fintech, the gaming sector has become an important part of the financial services market with huge growth potential and business opportunities. “AIGC’s new technology is becoming a major technological game changer, bringing revolutionary changes to the game development process, and AIGC games stocks are considered to have enormous investment value potential.
The proposed acquisition of CashBox will be financed by the issuance of new shares by Hong Kong-listed Gome Fintech, and the financial services platform aims to complete the acquisition by the end of the month, said Baron Song, executive director and chief financial officer of Gome Fintech, in a press conference on Wednesday afternoon.
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“The acquisition of CashBox is the first step in Gome Fintech’s strategic transition and preparation for globalization,” Song said.
“CashBox is an industry-leading game developer, with world-class management and R&D teams, valuable industry insights, professional knowledge and abundant resources. We believe the acquisition will create strong synergies for both our company and CashBox,” Song said.
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After the acquisition, according to estimates, Gome Fintech’s revenues are expected to more than triple from 82.2 million yuan at the end of 2023 to 309.5 million yuan ($42.8) from 82.2 million yuan in end 2023, while profits are expected to grow to 54.8 million yuan from 37 million yuan in December. The presentation of Gome Fintech on the stock exchange on Wednesday.
“The company plans, through the proposed acquisitions, to rely on CashBox’s large multi-regional user resources, combining them with the company’s advantages in Internet technology, to create synergies for the group’s business,” according to Gome Fintech in the document.
Founded in 2018, CashBox’s business model is to attract potential users through promotion on social and video platforms, then earn revenue through advertising and in-app purchases.
As of the end of 2023, CashBox had more than 20 million monthly active users and 126 million accumulated users, according to Gome Fintech documents. CashBox has developed and launched over 200 games.
CashBox users are mainly distributed in countries with high population density, such as the United States, Brazil, India and Indonesia. It has the ability to localize products based on the languages and cultural preferences of individual countries and regions. This helps improve user satisfaction and loyalty, according to the document.
“We hope to leverage Gome Fintech’s payment system to connect it to our system,” Aaron Li, CEO of CashBox, told the Post during the press conference. “There is great synergy in this industry and this will accelerate our growth.”