HONG KONG, Jun 30, 2020 - (ACN Newswire) - Sino-Entertainment Technology Holdings Limited ("Sino-Entertainment Technology Holdings" or the "Company", together with its subsidiaries, collectively referred as the "Group") has recently announced the details of the proposed listing of its shares on the Main Board of The Stock Exchange of Hong Kong Limited ("HKEx") (the "Global Offering").

Investment Highlights- Published an extensive portfolio of games and established successful partnerships with a significant number of publishers- An integrated major mobile game publisher and developer in China- Possessed game development capabilities and talents- Management team with extensive experience in the mobile game industry

Sino-Entertainment Technology Holdings plans to offer a total of 100,000,000 shares (subject to the Over-allotment Option), comprising 10,000,000 Hong Kong Public Offer Shares (subject to adjustment) and 90,000,000 International Offer Shares (comprising 66,000,000 new Shares and 24,000,000 Sale Shares, subject to adjustment and the Over-allotment Option), at an Offer Price ranges between HK$1.63 to HK$1.87 per Offer Share. The Public Offer will open at 9:00 a.m. on Tuesday, 30 June 2020 and will close at 12:00 noon on Monday, 6 July 2020. The allotment results will be announced on Tuesday, 14 July 2020. Dealings in shares on HKEx are expected to commence on Wednesday, 15 July 2020, under the stock code 6933.HK.

WAG Worldsec Corporate Finance Limited is the Sole Sponsor. Huajin Securities (International) Limited, Zhongtai International Securities Limited and China Tonghai Securities Limited act as Joint Global Coordinators and Joint Lead Managers. Huajin Securities (International) Limited, Zhongtai International Securities Limited, China Tonghai Securities Limited, BOCOM International Securities Limited, Guosen Securities (HK) Capital Company Limited, Soochow Securities International Brokerage Limited and Orient Securities (Hong Kong) Limited act as Joint Bookrunners.

Company Overview

Sino-Entertainment Technology Holdings is an integrated game publisher and developer in China with a focus on publishing mobile games in the market of China. The Group is committed to bringing quality and interactive gameplay experience to game players by drawing upon its experience and expertise in the mobile game industry together with its sound understanding with the Group's publishing partners and game players gained over the years of its operations to develop and publish high-quality and well-customised mobile games.

During the three years end 31 December 2019 (the "Track Record Period"), the Group has published over 320 third party games; and since the commencement of its mobile game development in 2015 and up to 21 June 2020, the Group has developed 22 proprietary games mainly in the RPG and casual games genres. It targets to launch five additional self-developed games in each of 2021 and 2022.

Business Model

Sino-Entertainment Technology Holdings is principally engaged in mobile game publishing as well as development and sale of customised software and mobile games. The Group has covered the businesses from upstream to midstream, being as the game developer, game publisher, co-publisher and distribution channel.

As a game developer, the Group focuses on the development of RPG and casual game genres, and these self-developed games were offered for sale or published by the Group.

As a game publisher, the Group is responsible for marketing, promotion, distribution, and other user-related services.

As a co-publisher, in light of the Group's publishing capabilities and resources, the Group also co-publish third party games with third party publishers. This business segment has generated the majority of the Group's revenue in the past three years.

As a distribution channel, the Group distributes third party games that the Group co-publishes, on its self-operated platform.

Financial Highlights

The total revenue of the Group was approximately RMB107.3 million, RMB151.2 million and RMB187.7 million for FY2017, FY2018 and FY2019, respectively, representing a CAGR of 32.3%. For FY2017, FY2018 and FY2019, the Group's gross profit was RMB40.0 million, RMB57.0 million and RMB75.8 million, respectively, and its gross profit margin was 37.3%, 37.7% and 40.4%, respectively.

The net profit of the Group for FY2017, FY2018 and FY2019 amounted to approximately RMB31.5 million, RMB39.4 million and RMB50.5 million, respectively, representing a CAGR of 26.6%. The net profit margin are 29.4%, 26.1% and 26.9% respectively. Excluding the non-recurring listing expenses of RMB4.8 million and RMB11.1 million for FY2018 and FY2019, the Group's net profit for the two years reached RMB44.2 million and RMB61.6 million, with a net profit margin of 29.2% and 32.8%, respectively.

Competitive Strengths

The Group believes that its success is attributable to the following competitive strengths:

First of all, the Group published an extensive portfolio of games and established successful partnerships with a significant number of publishers. During the Track Record Period, the Group co-published over 320 third party games including PRG, SLG, causal games and others.

With the business practice of co-publishing an extensive game portfolio of mobile games with wide coverage of game genres, the Group enjoyed the flexibility to select and focus on co-publishing third party games with relatively higher profitability and cease to publish games which do not meet its expected market reception, which in turn will diverse and mitigate its risk and generate stable revenue in its game publishing business.

The Group also successfully established partnerships with more than 120 mobile game publishing partners including third party publishers and service providers.Second, the Group is an integrated major mobile game publisher and developer in China.The Group is also committed to devoting its resources to develop its self-developed games and it had developed 22 mobile games since the commencement of its mobile game development in 2015 and up to the 21 June 2020. In addition to providing publishing services to third-party publishers as co-publisher for their third party mobile games, the Group has also published two of its self-developed proprietary games, namely Hollow Storm and Princess in Distress during the Track Record Period and launched one self-developed game, namely Stratagem in the Three Kingdoms in February 2020.Third, the Group possesses game development capabilities and talent. It believes that its experience and proficiency in identifying and targeting potential users, converting active users into paying users, and responding keenly to industry changes and user behaviour patterns help promote the Group's game developed in-house. As at 21 June 2020, the Group development team consists of 62 employees, 15 of whom had more than five years of experience in the mobile game industry.

Last but not least, the Group has a management team with extensive experience in the mobile game industry. With the experience of its senior management team, the Group is able to be more player-oriented and innovative to meet the ever-changing demand from players. Under the management team's leadership and vision, the Group aspires to further expand its business in the mobile game industry in China and to ensure further sustainable growth.

Mr. Sui Jiaheng, the Chairman of the Board and an Executive Director of Sino-Entertainment Technology Holdings concluded, "We are pleased to witness this significant milestone in the Group's history. Through our listing on the Main Board of HKEx, we will tap into the international capital markets. This will not only broaden our capital and shareholder base, but will also provide us with capital to fund our expansion plan, which will finally strengthen our position in the industry and further enhance our competitive advantages, thereby driving the Group's long-term development."

"Looking ahead, we will be devoted to further develop and strengthen our position in the mobile game development and publishing industry in China. We will strive to capture the rapidly growing mobile game industry in China by expanding our game development capabilities and coverage and increasing the number of our self-developed games that we launch into the market. In addition, we will further strengthen our publishing capabilities by expanding our third party game portfolio and diversify our revenue sources by placing our business focus on both development and publishing of mobile games."

Factsheet

Details of Global Offering:

Number of Offer Shares: 100,000,000 Shares comprising 76,000,000 newShares and 24,000,000 Sale Shares (subject to the Over-allotment Option) Number of Hong Kong Offer Shares: 10,000,000 Shares (subject to adjustment)Number of International Offer Shares: 90,000,000 Shares comprising 66,000,000 new Shares and 24,000,000 Sale Shares (subject to adjustment and the Over-allotment Option) Offer Price Range: From HK$1.63 to HK$1.87 per Offer ShareBoard Lot Size: 2,000 SharesNominal Value: US$0.0001 per SharePublic Offer Period: 9:00 a.m. on Tuesday, 30 June to 12:00 noon on Monday, 6 July 2020Announcement of Allotment Results: Tuesday, 14 July 2020Expected Listing Date: Wednesday, 15 July 2020Stock Code: 6933.HK

Use of Proceeds:

The aggregate net proceeds from the Global Offering (after deducting underwriting fees and estimated expenses payable by the Group in connection with the Global Offering), assuming an Offer Price of HK$1.75 per Offer Share, being the mid-point of the indicative Offer Price range of HK$1.63 to HK$1.87 per Share, will be approximately HK$99.8 million. The Group currently intends to apply the net proceeds from the Share Offer in the following manner:

Use of Proceeds / % of Net ProceedsEnhance game development capabilities and expand game portfolio: Approximately 33.1%Strengthen publishing capabilities: approximately 46.1%Establish an integrated game distribution platform: Approximately 13.7%Expand geographic coverage and build international user base: Approximately 7.1%

Track Record:

RMB '000 For the year ended31 December FY2017 FY2018 FY2019Revenue 107,267 151,214 187,710Gross profit 40,000 57,015 75,813Gross profit margin 37.3% 37.7% 40.4%Profit for the year 31,454 39,391 50,500Net profit margin 29.4% 26.1% 26.9%Listing expenses - 4,810 11,145Adjusted Profit by excluding listing expenses 31,454 44,201 61,645

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