HONG KONG, Feb. 13 /PRNewswire/ -- hongkong.com Corporation (Stock Code:
8006; website: http://www.hongkong.com), a leading China mobile applications, online
games and Internet services company, an 81%-owned subsidiary and a mobile and
portal unit of chinadotcom corporation, today announced it had signed a
definitive agreement to make a strategic investment in a profitable Beijing-
based online games company, Beijing 17game Network Technology Co. Ltd
("17game"). The transaction is contemplated to enable hongkong.com to acquire
a controlling position in 17game over time on an earn-out basis over the next
two years, based on a single digit earnings multiple.
According to an investment bank's recent research, the China online games
sector is expected to see revenue growth at a CAGR of 39% from 2003 -- 2008,
reaching US$1.5 billion annually by 2008 on the back of robust growth in
personal computer and Internet usage. Today, it is estimated that online
gaming in China is valued at US$150 million with 11 million annual
subscribers.
"17game presents a strategic fit with our existing business portfolio,
especially with our portal network, as it further strengthens the vertical
game channel of our China portal as well as provides a roll-out platform for
our further expansion in the fast growing online gaming sector," said John
Xiao, CEO of hongkong.com. "We are excited by the combination of our portal
platform and marketing capabilities with 17game's proven track record and
solid operating experience in the online game sector in China, which will
enable us to become a market leader in this market sector."
17game has a track record in launching and distributing successful online
games in the China market. Currently, 17game operates an online game which is
considered to be one of the top 10 online games in the China market and with
plans to add an additional online game to its portfolio. The new game is
ranked within the Top 5 online games in the beta testing stage in the Korean
online games market in terms of total aggregate play-time. 17game has a well-
established distribution network across China for the games it licenses,
including Internet cafes, software distributors, bookstores and department
stores.
"17game has developed a distribution network in China that has enhanced
its ability to convert the games it licenses from leading Korean games
developers into a profitable and thus far, scalable business with likely
strong upside in a rapidly growing sector," Xiao added.
"We feel that hongkong.com represents a perfect fit for 17game as both a
provider of funding and a knowledgeable strategic partner to our business with
its years of track record in the China market. We look forward to working with
the hongkong.com team as we build on our current success and drive the
business to a new level of performance over the coming years," said Dai Hong,
CEO of 17game.
hongkong.com Corporation noted that although it has executed an initial
investment agreement and expects to consummate the investment in the first
half of 2004, additional related transaction documents and customary closing
conditions do exist and there is no assurance that the transaction will be
consummated. Closing conditions include further due diligence, board approval
and the approval of the Growth Enterprise Market of the Stock Exchange of Hong
Kong Limited.
About hongkong.com Corporation
hongkong.com Corporation (GEM Stock: 8006; Website: http://www.hongkong.com), a
leading China mobile applications, online games and Internet services company,
and an 81%-owned subsidiary of chinadotcom corporation (NASDAQ: CHINA;
website: http://www.corp.china.com), listed on the GEM Exchange on 9th March, 2000.
In December 2000, hongkong.com was admitted as a constituent stock of the new
Hang Seng IT and IT Portfolio Indices.
The principal business areas of hongkong.com include Wireless such as SMS
and mobile applications, and Entertainment, including online games and portal
network (http://www.china.com ; http://www.hongkong.com). In April 2003, hongkong.com
acquired Newpalm (China) Information Technology Co., Ltd, a leading mobile
value added services provider in China, to participate in the fast growing
mobile value added services market in China.
With its strong financial position, hongkong.com will continue to look for
investment opportunities that are earnings accretive, with sound business
model, and synergistic to the existing core business portfolio.
Safe Harbor Statement
There is no assurance that the current growth of its business can be
maintained or that identified synergies will come to the fore. The statements
in this news release, other than the historical financial information, may
contain forward-looking statements that involve risks and uncertainties that
could cause actual results to differ from anticipated results. Further
information on risk factors that could affect, among other things,
hongkong.com Corporation's financial condition and results of operations is
detailed in hongkong.com Corporation's 2002 Annual Report and the latest
quarterly reports, as filed with the Growth Enterprise Market of the Stock
Exchange of Hong Kong Limited.
For further information, please contact:
Jane Cheng
Public Relations
Tel: (852) 2961 2750
Fax: (852) 2571 0410
Email: jane.cheng@hk.china.com
SOURCE hongkong.com Corporation
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Related links:
http://www.corp.china.com
http://www.hongkong.com
CONTACT:
Jane Cheng, Public Relations of hongkong.com
Corporation, +852-2961-2750, or fax, +852-2571-0410, or
jane.cheng@hk.china.com
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