Signage at the Tencent Holdings headquarters in Shenzhen, China, on Thursday, March 30, 2023. The … [+]
China Ruyi Holdings, a Chinese online film and gaming company whose investors include Internet giant Tencent, said it had raised HK$4 billion, or about $511 million, through the sale of new shares, according to a Hong Kong filing on Tuesday evening.
Tencent, which currently owns a 20.45% stake, will buy 500 million shares at a price of HK$1.60 each, and still hold about one fifth of the company after the issue is completed. Four minority investors would buy equal amounts as Tencent, whose stock is held by a subsidiary, Water Lily. Some 90% of funds raised will be used for investments in its film and game businesses as the impact of the Covid pandemic weakens, the filing said.
“After the end of the Covid-19 outbreak, the film industry has started to recover,” Ruyi said. Funds will provide a “definite amount of capital to further develop and expand its film and gaming businesses.”
Ruyi’s shares closed at HK$1.94 on Monday, the last day of trade; trading will resume today. They’ve have lost 30% in the past 12 months. Tencent, whose chairman Ma Huateng is worth $35.9 billion on the Forbes Real-Time Billionaires List today, has increased by 2%.
Ruyi’s profit last year fell to 790 million yuan from 1.17 billion yuan a year earlier amid fallout from China’s “zero-Covid” lockdowns. Revenue decreased from 2.3 billion to 1.3 billion yuan, the later almost all coming from film and television drama production, online streaming and game businesses.
China’s film industry has picked up this year. Its box office increased by 52.9% in the first six months from a year earlier with ticket sales of $3.7 billion, according to the IMDb website. That marked the first year-on-year increase since the Covid-19 pandemic, it said, citing Screen Daily. Hits such as “Wandering Earth II” and “Full River Red” boosted business.
Ruyi said last week that senior Tencent gaming executive Yang Ming had joined its board.
The company was once known as Hengten Neworks Group; its one-time controlling shareholding, cash-strapped real estate developer China Evergrande Group, hasn’t held stock since late 2021.
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