The major event in which Zhejiang Century Huatong Group Co., Ltd. plans to acquire 100% of the equity of Shengyue Network Technology Co., Ltd. for 29.8 billion yuan is still in full swing.

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2025-07-16

China Economic Net Beijing, January 7 (Reporter Wei Jingting) The major event in which Zhejiang Century Huatong Group Co., Ltd. (hereinafter referred to as "Century Huatong", 002602.SZ) plans to acquire 100% of the equity of Shengyue Network Technology (Shanghai) Co., Ltd. (hereinafter referred to as "Shengyue Network") for 29.8 billion yuan is still in full swing. On January 2, Century Huatong disclosed its reply (revised draft) on the "Notice of Feedback on the Review of Administrative License Projects in the China Securities Regulatory Commission".

Shengyue Network has the online game business, main operating assets and core operating team of Shanda Games Limited ( Shanda Games Co., Ltd.), a former listed company in the United States, Nasdaq (NASDAQ). The main operating entities of the target company have been engaged in the research, development, distribution and operation of online game products for a long time. The business scope covers all aspects of the online game industry chain. They have high-quality core game products such as "Legend of Blood", "Legend of Legend", "Dragon Valley", "Story of Adventure", and " Eternal Tower ", and a complete business system covering PC games, web games, and mobile games.

On December 24, 2018, the China Securities Regulatory Commission inquired about the goodwill of Century Huatong in its feedback, and asked the company to supplement the disclosure of the rationality of the appraisal value-added and transaction valuation of the target asset, the calculation process and confirmation basis of goodwill.

The acquisition premium of this acquisition is as high as 19.6 billion yuan. As of the evaluation base date, April 30, 2018, the valuation value of Shengyue Network's 100% equity was 31.003 billion yuan, with a value-added rate of 172.13%. Because in May 2018, Shengyue Network's shareholders' meeting made a resolution to distribute dividends of 1.2 billion yuan to all shareholders, and the transaction price was set at 29.803 billion yuan.

CSRC pointed out that due to the large goodwill at the consolidated financial statement level of Shengyue Network, the listed company will add 7.359 billion yuan of goodwill for this transaction. According to the review report for the preparation, the goodwill for the listed company as of August 31, 2018 as of August 31, 2018 was 14.829 billion yuan, accounting for 57.97% of the net assets for the preparation.

Shengyue Network's consolidated financial statements are mainly formed by inheriting the goodwill of Shanda Games' consolidated financial statements, and the external acquisition of some companies' equity in 2018.

On December 30, 2015, Yilishengda Hong Kong entrusted its voting rights of 48.7592 million Class B shares (equity accounts for 9.08%) to Haoding BVI. So far, the actual controller and chairman of Century Huatong Wang Miaotong obtained control of Shanda Game , and the above acquisition transaction generated goodwill of 6.779 billion yuan.

Century Huatong said in reply that the game industry is a light asset industry, and its production and operation process generally does not require large investment in fixed assets or production equipment. Therefore, its asset scale and net asset scale are generally low, resulting in a generally high appraisal value-added rate in acquisition cases of listed companies in the same industry. In this transaction, Shengyue Network's corresponding appraisal value-added rate was 172.13%, which is significantly lower than the average level of comparable transactions.

Sina Finance reported that according to calculations, if it is merged under non-same control, and calculated based on the net asset price of the target as of the evaluation base date, the acquisition price of 29.8 billion yuan will bring goodwill of 18.1 billion yuan. Since Century Huatong's acquisition was merged under the same control, it avoided huge goodwill.

, Century Huatong, which started with the sales of auto parts, was listed on July 28, 2011. However, its main business was bleak and it embarked on the road of acquiring game assets at the beginning of 2014. Since then, Century Huatong has successively acquired several game companies. With rounds of mergers and acquisitions, Century Huatong achieved good results, but it also formed huge goodwill.

As of the first half of 2018, Century Huatong's goodwill amount was 7.071 billion yuan. As of the end of the third quarter of 2018, Century Huatong's goodwill amount was 7.464 billion yuan, an increase of 273.25% from the end of 2017.

China Economic Net reporter sorted out the goodwill growth of Century Huatong. In 2014, Century Huatong acquired Shanghai Tianyou Software Co., Ltd. (hereinafter referred to as "Tianyou Software") and Wuxi Qiku Network Technology Co., Ltd. (hereinafter referred to as "Qiku Network"), forming a total of 1.503 billion yuan in goodwill. Among them, the acquisition of Tianyou Software resulted in goodwill of 759 million yuan, and the acquisition of Qiku Network resulted in goodwill of 744 million yuan.

In 2015, Tianyou Software, a wholly-owned subsidiary of Century Huatong , acquired Quyou ( Xiamen ) Technology Co., Ltd. (hereinafter referred to as "Xiamen Quyou"), forming goodwill of 293 million yuan. As of the end of 2015, Century Huatong's goodwill increased to 1.796 billion yuan.

In 2016, Century Huatong acquired 60% of the equity of Shenzhen Youying Culture Media Co., Ltd. (hereinafter referred to as "Youying Company") and 100% of the equity of Chongqing Manxiangzu Culture Communication Co., Ltd. (hereinafter referred to as "Chongqing Manxiangzu") through Qiku Network, with new goodwill of 66.3911 million yuan. As of the end of 2016, Century Huatong's goodwill amount was 1.862 billion yuan.

In 2017, Wuxi Qiku Investment Co., Ltd. (hereinafter referred to as "Qiku Investment"), a wholly-owned subsidiary of Century Huatong, acquired 51% of the equity of Beijing Wenmai Interactive Technology Co., Ltd. (hereinafter referred to as: Wenmai Interactive), forming goodwill of 137 million yuan. As of the end of 2017, Century Huatong's goodwill increased to 2 billion yuan.

In 2018, Century Huatong acquired DianDian Interactive Holding (hereinafter referred to as "Diandian Cayman") to form goodwill of 5.204 billion yuan, acquired Diandian Interactive (Beijing) Technology Co., Ltd. (hereinafter referred to as "Diandian Beijing") to form goodwill of 3.9177 million yuan, and acquired Chengdu Meihui Tianxia Technology Co., Ltd. (hereinafter referred to as "Chengdu Meihui") to form goodwill of 878,800 yuan.

In August 2014, the acquisition of Tianyou Software and Qiku Network was completed, generating goodwill of 1.503 billion yuan

In 2014, Century Huatong carried out a major asset restructuring and successfully acquired 100% of the equity of Qiku Network and Tianyou Software. Through this acquisition, the company's main business has changed from the original auto parts to the dual main businesses of auto parts and Internet games.

In that year, Century Huatong added 1.503 billion yuan in goodwill, of which the acquisition of Tianyou Software generated 759 million yuan in goodwill, and the acquisition of Qiku Network generated 744 million yuan in goodwill.

On January 22, 2014, Century Huatong released a major asset restructuring plan. The company plans to purchase 100% of the equity of Tianyou Software held by Wang Ji , Tang Qiqing and Ren Xianghui in a combination of issuing shares and paying cash; purchase 100% of the equity of Qiku Network held by Shao Heng , Cai Weiqing and Tianshen Interactive. The independent financial advisor is Haitong Securities.

According to the final report, Century Huatong issued a total of approximately 197 million shares to all shareholders of Tianyou Software and Qiku Network and paid 390 million yuan in cash to purchase 100% of Tianyou Software and 100% of Qiku Network; the company used the price lock method to issue 54.3933 million shares to 10 specific investors including Shengtong Investment, Wang Miaotong, Shanghai Lingqing, Ningbo Ruisi, Liu Chaochen, Shanghai Hexi, Shanghai Giant, Shanghai Lingrui, Wuxi Linghui, Dinglu Zhongyuan to raise 390 million yuan in cash, and the funds raised were used to pay the cash consideration for the purchase transaction subject. Century Huatong issued a total of 251 million shares, with an issue price of 7.17 yuan per share.

takes December 31, 2013 as the evaluation base date. The estimated 100% equity of Tianyou Software is approximately RMB 958 million, and the estimated 100% equity of Qiku Network is approximately RMB 858 million. The two parties to the transaction negotiated and determined that the above-mentioned equity transaction price was 950 million yuan. The transaction price is 73.0381 million yuan compared with Tianyou Software's parent company's audited book assets, with a premium of 877 million yuan.

Qiku Network's 100% equity appraisal value is 862 million yuan. The two parties negotiated and determined that the above-mentioned equity transaction price was 850 million yuan. The transaction price is 56.4924 million yuan compared with the audited book assets of Qiku Network's parent company, with a premium of 794 million yuan.

Tianyou Software promised that the net profit attributable to the parent company in 2014, 2015 and 2016 would be approximately RMB 90 million, RMB 110 million and RMB 140 million, respectively; Qiku Network's net profit attributable to the parent company in 2014, 2015 and 2016 would be approximately RMB 90 million, RMB 124 million and RMB 164 million, respectively.

transaction involves Shengtong Investment issued shares to raise supporting funds established by the actual controller of the listed company, Wang Miaotong, and the management of the listed company; at the same time, after the completion of this restructuring, the counterparts of the transaction, Wang Ji and Shao Heng, become shareholders with a shareholding ratio of more than 5% of the listed company. According to the "Listing Rules", they are affiliated parties to the listed company. Therefore, this transaction constitutes an affiliated transaction.

According to the "Approval on Approval of Zhejiang Century Huatong Vehicle Industry Co., Ltd. to issue shares to Wang Ji and others to purchase assets and raise matching funds", the company acquires 100% of Tianyou Software's equity and 100% of Qiku Network's equity by issuing shares and paying cash to purchase assets and raising matching funds. The matter was implemented at the end of August 2014.

Since September 2014, the financial data of Tianyou Software and Qiku Network were merged into the consolidated financial statements. In that year, Century Huatong achieved operating income of 1.712 billion yuan, an increase of 39.5% over the previous year, and the net profit attributable to shareholders of listed companies was 209 million yuan, an increase of 157.72% over the previous year.

In June 2015, the acquisition of Xiamen Quyou added 293 million yuan in new goodwill, and the goodwill increased to 1.796 billion yuan

In June 2015, Tianyou Software, a subsidiary of Century Huatong, completed the acquisition of 100% of Xiamen Quyou's equity for 350 million yuan.

Through this acquisition, Century Huatong added 293 million yuan of goodwill. As of the end of 2015, Century Huatong's goodwill amount was 1.796 billion yuan.

It is worth noting that Tianyou Software, a subsidiary of Century Huatong, did not issue an announcement to acquire Xiamen Quyou. It was not until the semi-annual report was disclosed on August 12, 2015 that this merger and acquisition case with a transaction amount of 350 million yuan was seen.

In this regard, an investor asked Century Huatong on the Panoramic Interactive Platform whether the company spent 350 million yuan to acquire Xiamen Quyou, and why there was no announcement. Century Huatong said that it did not meet the relevant disclosure requirements.

On September 8, 2015, Century Huatong issued the "Announcement on Reply to the "2015 Semi-Annual Report Inquiry Letter". The announcement stated that the company received the "Inquiry Letter on the 2015 Semi-annual Report of Zhejiang Century Huatong Group Co., Ltd." (Inquiry Letter on Semi-annual Report of SMEs [2015] No. 5) from the Management Department of the Shenzhen Stock Exchange SMEs (Inquiry Letter on Semi-annual Report of SMEs [2015] No. 5).

In the inquiry letter, the Shenzhen Stock Exchange pointed out: During the reporting period, your company acquired Quyou (Xiamen) Technology Co., Ltd. for 350 million yuan in cash. The book value of the target company's net assets purchase date was 55.51 million yuan and the fair value was 58.07 million yuan. Please explain the reason why the transaction amount is significantly higher than the value of the target assets, and explain whether the relevant approval procedures and disclosure obligations have been fulfilled.

Century Huatong replied that Xiamen Quyou is a game development and operation company dedicated to spreading Chinese traditional culture. It has its own characteristics and popularity in the industry. After integration, it complements the advantages of the original company's game products and platforms.

The company's acquisition also entrusts the securities qualification assessment of the Bank and Credit Evaluation for evaluation and issued a report. The evaluation estimate and the management team confirmed that Quyou's net profit level is expected to be around seven times, which is lower than similar acquisitions in the market. At the same time, the company's business team also conducted arguments, believing that the valuation is low and is beneficial to the company's game industry development. According to the company system, it will be implemented after the chairman issuance.

According to the relevant provisions of the Shenzhen Stock Exchange Listing Rules, the company's acquisition of Quyou did not meet the timely disclosure requirements, but the company made relevant disclosures in its 2015 semi-annual report.

In 2015, Century Huatong achieved operating income of 3.026 billion yuan, a year-on-year increase of 76.72%, and the net profit attributable to shareholders of listed companies was 408 million yuan, a year-on-year increase of 95.00%.

Among them, Xiamen Quyou's operating income and net profit included in the financial statements were RMB 283 million and RMB 129 million respectively.

In May and November 2016, the acquisition of 60% of the equity of Chongqing Manxiangzu and Youying Film Company was completed, with new goodwill of 66.3911 million yuan, and goodwill increased to 1.862 billion yuan

In May 2016, Qiku Network, a wholly-owned subsidiary of Century Huatong, acquired 100% of the equity of Chongqing Manxiangzu by paying cash, with a transaction amount of 60 million yuan and a new goodwill of 56.602 million yuan.

In November 2016, Qiku Network, a wholly-owned subsidiary of Century Huatong, acquired 60% of the equity of Youying Company through cash payment, with a transaction amount of 10 million yuan and a new goodwill of 9.7909 million yuan.

In 2016, Century Huatong acquired Chongqing Manxiangzu and Youchao Film Company through Qiku Network to add a total of 66.3911 million yuan in goodwill. As of the end of 2016, Century Huatong's goodwill amount was 1.862 billion yuan.

In 2016, Century Huatong achieved operating income of 3.456 billion yuan, a year-on-year increase of 14.21%; and achieved net profit attributable to shareholders of listed companies of 503 million yuan, a year-on-year increase of 23.44%.

In December 2017, the acquisition of 51% of Wenmai Interactive's equity was completed, with new goodwill of 137 million yuan, and the goodwill increased to 2 billion yuan

In 2017, Century Huatong's wholly-owned subsidiary Qiku Investment acquired 51% of Wenmai Interactive's equity for 150 million yuan.

Qiku Investment acquired 51% of Wenhui Interactive's equity, and Century Huatong added 137 million yuan in goodwill. As of the end of 2017, Century Huatong's goodwill amount was 2 billion yuan.

On November 15, 2017, Century Huatong issued the "Announcement on the Acquisition of 51% Equity of Beijing Wenmai Interactive Technology Co., Ltd."

announced that Century Huatong's wholly-owned subsidiary Qiku Investment recently reached a preliminary agreement with Li Gang and Zhangshu Haoyu Investment Management Center (Limited Partnership) (hereinafter referred to as "Haoyu Investment) on equity transfer matters and signed the "Letter of Intent for Equity Transfer of Beijing Wenmai Interactive Technology Co., Ltd.". Li Gang transferred 30% of the equity and interests of Wenmai Interactive to Qiku Investment, with a transfer price of 88.2353 million yuan. Haoyu Investment transferred its holdings to Qiku Investment. Wenhui Interactive's 21% equity and equity, with a transfer price of 61.7647 million yuan. Qiku Investment acquired 51% equity and equity in Wenhui Interactive for a total of 150 million yuan. After the completion of this transaction, Wenhui Interactive will become the company's holding subsidiary.

All parties confirmed that according to Wenhui Interactive's operating conditions, the negotiated valuation is RMB 300 million. This transaction does not constitute an associated transaction.

In this transaction, Fan Yingjie as Wenhui Interactive The actual controller promises that Wenhui Interactive's annual operating performance from 2018 to 2020 will not be less than RMB 50 million, RMB 60 million and RMB 72 million respectively.

On December 15, 2017, Century Huatong subsidiary Qiku Investment and Wenhui Interactive completed the equity delivery.

Announcement shows that Wenhui Interactive was established in 2014 and mainly engaged in technology development, technical consultation, technical services, and technology promotion; graphic design, Production; film and television planning, etc. In addition to Li Gang and Haoyu's investment, Fan Yingjie holds another 49% of the company's equity.

Financial data shows that Wenhui Interactive achieved operating income of 17.118 million yuan and net profit of 384,600 yuan in 2016. From January to August 2017, the company's operating income was 29.2836 million yuan and net profit of 11.2263 million yuan.

China Economic Net reporter noticed that in 2017, 1 In 2019, Shandong Mining Machine announced the plan to acquire two game companies, including Linyou Interactive and Wenhui Interactive. During this period, due to the question of the identity of the "post-95" shareholder of Wenhui Interactive and the registered address of Linyou Interactive, the Shenzhen Stock Exchange also issued an inquiry letter. Later, Shandong Mining Machine revised the major capital restructuring plan, excluding Wenhui Interactive in the acquisition case.

Shandong Mining Machine Restructuring Plan shows that Wenhui Interactive promised that from 2017 to 2019, the company will deduct illegal activities respectively. Net profit is no less than 45 million yuan, 58 million yuan, and 75 million yuan.

According to the Beijing News, Wenhui Interactive's performance forecast for the next four years is mainly based on the operating data of its first game "Hot Blood Battle Song". The acquisition plan disclosed that from March 2016 to September 30, "Hot Blood Battle Song" has accumulated about 11.83 million registered users, with an average monthly active game user base of about 1.2171 million, and an average monthly turnover of more than 10 million. Yuan.

In fact, after "Hot Blood Battle Song" was launched, many operating data declined half a year ago. Data shows that after it was launched in March 2016, the number of users and active users of "Hot Blood Battle Song" grew rapidly in the first three months, and the game recharge amount in May of that year reached a peak of 22.5224 million yuan. By September, the game's monthly recharge amount was 13.9162 million yuan, down nearly 40% from the highest value.

201 In 7 years, Century Huatong achieved operating income of 3.491 billion yuan, a year-on-year increase of 1.01%; and achieved net profit attributable to shareholders of listed companies of 783 million yuan, a year-on-year increase of 55.47%.

wenhui Interactive's operating income and net profit included in the financial statements were RMB 16.3334 million and RMB 10.6198 million, respectively.

completed the acquisition of Diandian Cayman, Diandian Beijing and Chengdu Meihui in January and March 2018. A total of 5.209 billion yuan of goodwill was added. At the end of the third quarter, goodwill increased to 7.464 billion yuan

2018 semi-annual report shows that during this reporting period, Century Huatong acquired 100% of the equity of Diandian Cayman and Diandian Beijing and 100% of the equity of Chengdu Meihui.Among them, Century Huatong's acquisition of 100% of the equity of Diandian Cayman and Diandian Beijing is an related transaction, with a total transaction amount of 6.939 billion yuan. The independent financial advisor for the transaction is Changjiang Securities Underwriting and Sponsor Co., Ltd.

Century Huatong acquired Diandian Cayman to form goodwill of 5.204 billion yuan, acquired Diandian Beijing to form goodwill of 3.9177 million yuan, and acquired Chengdu Meihui to form goodwill of 878,800 yuan.

On October 1, 2016, Century Huatong issued a reply to the Shenzhen Stock Exchange's "Inquiry Letter on Restructuring of Zhejiang Century Huatong Group Co., Ltd.".

In the inquiry, the Shenzhen Stock Exchange pointed out: After the completion of this transaction, it is expected to add 6.116 billion yuan of goodwill. According to the financial statements for preparation for June 30, 2016 disclosed by your company, your company's expected goodwill balance is 7.969 billion yuan, accounting for 64.61% of the total assets. Please combine the profit forecast and goodwill impairment test of the target company to conduct a sensitivity analysis on the impact of goodwill impairment on your company's future operating performance, and make major risk warnings on the specific risks of your company's high goodwill balance, high proportion of total assets, and large goodwill impairment.

Century Huatong replied: According to the provisions of the "Enterprise Accounting Standards - Asset Impairment", the company shall conduct an impairment test on the asset group or asset group combination related to goodwill at least at the end of each year. If the recoverable amount of the asset group or asset group combination related to goodwill is lower than its book value, the asset impairment loss shall be recognized for the difference.

In this transaction, the recoverable amount of the asset group or asset combination related to goodwill is mainly related to the operating performance of the bidding company in the future period during this transaction. If the target company's operating performance in the future does not reach the profit forecast data based on the transaction price, and during the goodwill impairment test, the amount of recoverable assets or asset group combinations related to goodwill is lower than their book value, the company will incur goodwill impairment losses.

Regarding the high goodwill balance, the high proportion of total assets, and the risk of large goodwill impairment, the listed company has made a reminder in the report "Major Risk Warning/IV. Goodwill Impairment Risk": According to the relevant provisions of the "Enterprise Accounting Standards", this transaction is a merger of enterprises under non-same control. The purchaser shall recognize the difference between the merger cost greater than the fair value share of the identifiable net assets obtained by the purchaser in the merger as goodwill, and an impairment test is required at the end of each future fiscal year, and the impairment part is included in the current profit and loss.

Due to the fierce competition in the online game industry, the company's performance has certain instability. After the completion of this transaction, the company's goodwill balance is high and the proportion of total assets will be high, which will lead to greater uncertainty in the impairment of goodwill. If the target company's future operating performance is lower than expected, the goodwill formed by the acquisition of the target assets will be risky of impairment, which will have an adverse impact on the company's operating performance. ”

According to the transaction plan, Century Huatong plans to purchase 100% of Jingyao International Limited (hereinafter referred to as "Jingyao International"), 100% of Huacong International Holding Limited (hereinafter referred to as "Huayu International"), 100% of Huayu International Holding Limited (hereinafter referred to as "Huayu International") and 100% of Diandian Beijing from the counterparty by issuing shares and paying cash. It plans to purchase 40% of Diandian Cayman's equity from the counterparty by payment of cash. Among them, Jingyao International, Huacong International and Huayu International hold a total of 60% of Diandian Cayman's equity.The specific arrangements are as follows:

Company intends to purchase 100% of the shares of Huacong International, Jingyao International and Huayu International and 60% of the shares held by Diandian Beijing by issuing shares from Shanghai Huacong Investment Center (Limited Partnership) (hereinafter referred to as "Huacon Investment"), Shanghai Jingyao Investment Center (Limited Partnership) (hereinafter referred to as "Jingyao Investment") and Shanghai Huayu Investment Center (Limited Partnership) (hereinafter referred to as "Huayu Investment") by issuing shares; it intends to purchase 40% of the shares held by Diandian Beijing by paying cash from Zhong Yingwu and Guan Yitao; it intends to purchase 40% of the shares held by Diandian Cayman by paying cash from Funplus Holding through overseas subsidiaries. After the completion of this transaction, the company will hold 100% of the equity of Cayman and 100% of the equity of Diandian Beijing through direct or indirect methods.

According to the "Issuance and Asset Purchase Agreement" signed by the company with Huacong Investment, Jingyao Investment and Huayu Investment, the "Cash Purchase Agreement" signed by the company, the company, the company, the "Cash Purchase Agreement" signed by Shaoxing City Shangyu Qudian Investment Partnership (Limited Partnership) (hereinafter referred to as "Qudian Investment") and Funplus Holding, Zhong Yingwu and Guan Yitao. The transaction price is based on the "Zhejiang Century Huatong Group Co., Ltd.'s plan to issue shares and pay cash to purchase Dian Dian Interactive" issued by China Qihua Asset Appraisal Co., Ltd. The evaluation results determined by the Holding Equity Project Evaluation Report (China Century Huaping Newspaper [2016] No. 3246) and the "Equity Project Evaluation Report of Zhejiang Century Huatong Group Co., Ltd. to issue shares and pay cash to purchase Diandian Interactive (Beijing) Technology Co., Ltd." (China Century Huaping Newspaper [2016] No. 3245) are determined by negotiation by all parties to the transaction. The transaction consideration of 100% equity of Diandian Cayman is 6.839 billion yuan, of which the share consideration is 4.103 billion yuan and the cash consideration is 2.736 billion yuan. The transaction consideration of 100% equity in Diandian Beijing is 100 million yuan, of which the share consideration is 60 million yuan and the cash consideration is 40 million yuan.

According to the "Subscription Agreement on the Private Issuance of Shares by Zhejiang Century Huatong Group Co., Ltd." signed by the company with Qudian Investment, Shaoxing Shangyu Dingtong Investment Partnership (Limited Partnership) (hereinafter referred to as "Dingtong Investment"), Wang Ji, Shao Heng, Wang Juanzhen, Xu Ayi and Cai Mingyu, it stipulates that the company will issue a total of 203 million shares to the subscribers, with an issue price of 20.42 yuan per share, and raise a total of 4.15 billion yuan of supporting funds. The supporting funds raised will be used to pay the cash consideration and fundraising projects of this transaction after deducting the issuance fee.

On February 17, 2017, the China Securities Regulatory Commission issued the "Approval on Approval of Zhejiang Century Huatong Group Co., Ltd. to Issuing Shares to Shanghai Jingyao Investment Center (Limited Partnership) and other shares to purchase assets and raise matching funds" (Securities Supervision and Administration License [2017] No. 217), and approved the company to issue 120 million shares, 26.721 million shares, and 78.6931 million shares to Huacong Investment, Jingyao Investment and Huayu Investment respectively to purchase related assets, and approved the company to issue no more than 204 million new shares to raise the matching funds for the issuance of shares to purchase assets.

On January 12, 2018, the company paid Zhong Yingwu and Guan Yitao a total of RMB 40 million in cash consideration of Diandian Cayman through its wholly-owned subsidiary Ningxia Bangchengsheng Investment Co., Ltd. (hereinafter referred to as "Ningxia Bangchengsheng") and Ningxia Jinshengze Investment Co., Ltd. (hereinafter referred to as "Ningxia Jinshengze") and Ningxia Jinshengze Investment Co., Ltd. (hereinafter referred to as "Ningxia Jinshengze") to Funplus Holding.

As of January 16, 2018, the company has completed the asset delivery procedures for the 100% equity of Jingyao International, 100% equity of Huacong International, 100% equity of Huayu International, 100% equity of Diandian Beijing 100% equity and 40% equity of Diandian Cayman. The company directly holds 100% of the equity of Liandian Beijing, and indirectly holds 100% of the equity of Jingyao International through its wholly-owned subsidiary Xiangyang Dinglian Network Technology Co., Ltd. (hereinafter referred to as "Xiangyang Dinglian") and Xiangyang Ruichuangda Information Technology Co., Ltd. (hereinafter referred to as "Xiangyang Ruichuangda"), indirectly holds 100% of the equity of Huacong International and 100% of the equity of Huacong International through Xiangyang Ruichuangda, and indirectly holds 100% of the equity of Liandian Cayman through Jingyao International, Huacong International, Huacong International, Huayu International, Ningxia Bangchengsheng and Ningxia Jinshengze.

On January 22, 2018, the company issued 205 million shares to seven subscribers including Qudian Investment, with an issue price of 20.22 yuan per share, raising a total of 4.15 billion yuan of supporting funds, deducting various issuance expenses (excluding taxes), RMB 75.2212 million, and the actual raised funds were RMB 4.075 billion. This investment industry was reviewed and verified by Beijing Yongtuo Accounting Firm (Special General Partnership) and issued the "Capital Verification Report" (Jing Yong Verification Number (2018) No. 210004).

On January 26, 2018, the company issued a total of 227 million shares to Huacong Investment, Jingyao Investment and Huayu Investment, with an issue price of 18.35 yuan per share. Huacong Investment, Jingyao Investment and Huayu Investment subscribed a capital of 4.163 billion yuan with their 60% equity in Diandian Beijing and Diandian Cayman. This investment industry was reviewed and verified by Beijing Yongtuo Accounting Firm (Special General Partnership) and issued the "Capital Verification Report" (Jing Yong Verification Number (2018) No. 210007).

The registration procedures for the newly issued 205 million shares of the funds raised and the newly issued 227 million shares of the purchase of asset issuance were completed on January 26, 2018 at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. and were listed on February 2, 2018. After this issuance, the company's total share capital is 1.459 billion yuan.

Century Huatong disclosed the acquisition of Chengdu Meihui in its 2018 semi-annual report. On March 9, 2018, Century Huatong acquired 100% of the equity of Chengdu Meihui, an advertising design and production company, with its own funds of 1.1658 million yuan.

In addition, Century Huatong sold 51% of Wenmai Interactive's equity on March 19, 2018. The counterparty was shown to be Shengyue Software (Shenzhen) Co., Ltd. or its designated affiliated third party. The transaction price was 24.75 million yuan. Wenmai Interactive is no longer included in the scope of financial merger.

Century Huatong's goodwill decreased by 137 million yuan due to the sale of 51% of Wenhui Interactive's equity.

Shengyue Network's goodwill was merged into Century Huatong. The transaction was completed. Century Huatong's goodwill reached 14.829 billion yuan

On June 12 this year, Century Huatong announced the suspension of trading and reorganization of the acquisition of 100% of Shengyue Network Technology (Shanghai) Co., Ltd. (hereinafter referred to as "Shengyue Network"). On September 12, Century Huatong disclosed its restructuring plan, intending to acquire 100% of Shengyue Network's equity for 29.8 billion yuan. The independent financial advisor is Changjiang Securities Underwriting and Sponsor Co., Ltd. Shengyue Network is the operating entity of Shanda Games.

On November 10, Century Huatong released a draft for reorganizing Shanda Games. The draft shows that Century Huatong plans to purchase 100% of the equity of Shengyue Network held by Yao Quru and 29 other counterparties by issuing shares and paying cash. The transaction price of the target assets is 29.803 billion yuan, of which 2.929 billion yuan was paid to Ningbo Shengjie to purchase 9.83% of the equity of Shengyue Networks held by him; 1.413 billion shares were issued to the remaining 28 shareholders of Shengyue Networks except Ningbo Shengjie to purchase 90.17% of the equity of Shengyue Networks held by him.

Century Huatong plans to issue shares to no more than 10 (including 10) specific investors who meet the conditions to raise matching funds for this restructuring, with the total amount of funds raised not exceeding 6.1 billion yuan. After deducting the issuance fees and intermediary agency fees of this transaction, the supporting funds will be used to pay the cash consideration of this transaction and supplement the working capital of the listed company.

As of the evaluation base date, April 30, 2018, the evaluating value under Shengyue Network's 100% shareholder equity income method was 31.029 billion yuan, and the evaluating value under the market method was 31.003 billion yuan; the evaluation conclusion was evaluating result using the market method, which was 31.003 billion yuan. The evaluation result is 172.13% compared with the book value of the net assets attributable to the parent company's shareholders on the basis date of Shengyue Network's assessment.

On May 21, 2018, Shengyue Network shareholders' meeting made a dividend resolution, distributing 1.2 billion yuan to all shareholders. Based on the above evaluation results and the future dividends of the target company's evaluation base, after consensus among all parties to the transaction, the transaction price of the listed company's acquisition of 100% of Shengyue Network's equity was determined to be RMB 29.803 billion.

Considering the impact of the 2018 semi-annual equity distribution, the issuance price of the shares purchased by Century Huatong this time is determined to be 19.02 yuan per share.