Core viewpoints
Jinya Science and Technology teamed up with Taobao to create a closed loop for e-sports. Jinya Technology subsidiary Yinchuan Holy Land signed a cooperation agreement with Zhejiang Taobao Network Co., Ltd. to carry out strategic cooperation in related fields around the "WCA2015 World e-Sports Competition". Taobao online Game is the largest online trading platform for game virtual goods in China. Taobao game will set up "Taobao" special area for WCA world e-sports competition, and realize the communication and user interaction of WCA 2015 in Taobao, Mobile Taobao, mobile Alipay and other platforms. We believe that this can enhance the brand image of WCA, expand the cross-industry communication of WCA, speed up the realization of events, and create an ecological closed loop of e-sports.
Further increase investment in Minghe Minghe. Jinya Technology transferred 28.32 per cent of Mingheming shares held by Ning Yi for 70 million yuan and will hold a total of 79.32 per cent of Mingheming shares upon completion of the deal. Previously, the company held a 51% stake in Mingheming through capital increase, and after the completion of this transaction, the company became the absolute controlling party. After the capital increase, the company defines the assessment mechanism for the management: 1) Mingheming promises to belong to the parent company for 2015-2017, the net profit after deduction is 4000 / 6000 / 80 million yuan, if the performance of a single year exceeds, the cumulative net profit of three years is not less than 180 million yuan; 2) the total number of WCA audience reaches 100 million actual effective people (non-person-times), and the maximum number of online people in the finals is not less than 20 million. 3) long-term cooperation with 20 professional media, 18 network-wide coverage, cooperation of 278 competition days of video channel media. We believe that the performance assessment (net profit) and non-performance assessment (number of users, channels, media, etc.) define the business objectives of WCA and point out the direction for the management and investors of the company.
Increase management incentives. In addition to defining the assessment criteria, Jinya Technology has formulated a detailed reward and punishment mechanism, which is intended to increase incentives to management. We believe that the performance appraisal and reward and punishment mechanism balance the interests of all parties, play a guiding role to the operation team, and realize the deep binding of the management team. Jinya Technology and Mingheming agreed: if the performance is not up to standard, all the remaining shares will be transferred unconditionally to the company; if the performance of a single year is up to standard, Ningyi will be rewarded with cash of 1700 / 2300 / 30 million yuan; if the cumulative performance of three years reaches the standard, the remaining equity will be purchased with an overall valuation of 800 million yuan; if the cumulative performance of the three years exceeds the standard, 50% of the excess will be awarded to Mingheming and the management team.
It is recommended that you pay attention to WCA operation data. In view of the high international valuation of e-sports and the scarcity premium and synergy of WCA, we maintain the company's recommended rating. We recommend to pay attention to the operation data of WCA, including the number of users in the whole network, the number of people online, the length of viewing time, and so on.