Yeahka Acquires Additional 42.5% Equity Interest in Chuangxinzhong to Maximize Synergies in its Precision Marketing Services
YEAHKA, a leading technology platform in China, announced that it has agreed to acquire an additional 42.5% stake in Beijing Chuangxinzhong Technology for RMB170 million, which increases the Company’s stake to 85%. The consideration will be settled partially by payment of cash amount of RMB15 million and partially by the allotment and issue of 4,902,718 consideration shares by the Company at a price of HK$37.5 per consideration share.
Once issued, the consideration shares would represent approximately 1.10% of the existing issued share capital of Yeahka as at the date of the announcement and approximately 1.08% of the enlarged issued share capital. In November 2020, Yeahka announced its initial agreement to acquire a 42.5% stake in Chuangxinzhong. This additional agreement to increase Yeahka’s stake in Chuangxinzhong demonstrates the Company’s commitment to developing and enhancing its technology enabled business services with its focus on precision marketing.
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Chuangxinzhong is a leading content performance marketing service provider in China and has accumulated a large advertiser base. It provides accurate content delivery through audience analysis based on big data, while providing advertisers with comprehensive performance marketing strategies, creativity, performance monitoring and optimization services. Given the Company’s strong position in the market, the agreement is there to ensure Chuangxinzhong’s commitment to delivering a net profit over the next three years of no less than RMB45 million, RMB53 million and RMB62 million, respectively.
Yeahka has striven to develop and expand its marketing platform for precision advertising based on offline traffic. Through its payment services, Yeahka is able to reduce the cost of acquiring marketing service customers, and maximize the value of its marketing services leveraging insights gained from merchants and consumers. The Company has also launched its Data Management Platform (DMP), Juliang, a precision advertising platform powered by AI and machine learning. Juliang has attracted a large amount of offline traffic from over ten offline payment-based channels, including gas stations, car parks, supermarkets and retailers, as well as colleges and universities.
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The additional stake will enable Yeahka and Chuangxinzhong to achieve stronger synergies and further expand the Company’s marketing services. The strategic cooperation will enable both companies to enhance their integration of high-quality resources, and unlock online and offline media resources and data.
Mr. Luke Liu, Chairman of the Board, Chief Executive Officer and Executive Director of Yeahka, remarked, “Our additional stake in Chuangxinzhong represents a critical step in the development and expansion of our precision marketing platform. Yeahka’s core investment rationale is based on extensive potential synergies and strong relationships between two parties. On one hand, the cooperation with Chuangxinzhong will rapidly expand Yeahka’s online advertising inventory and potential, which will enable Juliang to offer more effective services. The rapid expansion of customer profiles and traffic labels will further optimize Yeahka’s adverting delivery model and improve its advertising efficiency to achieve favorable marketing ROIs for advertisers. On the other hand, the extensive experience of Chuangxinzhong’s team in the advertising industry and their well-regarded capabilities in delivering precision online advertising will further strengthen overall capabilities and improve advertising creativity of Yeahka’s marketing team, enabling Yeahka to achieve more effective marketing services for digital content.”
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