Eshallgo Inc. (NASDAQ:EHGO) shares are trading lower premarket today. The company made a strategic move by acquiring D&K Asset Management (Hong Kong) Co., Ltd. and forming a partnership with Beijing Liuliuqiu Cultural Development Co., Ltd.
This acquisition marks Eshallgo's official entry into the Tencent business ecosystem and signals a new cooperative approach in office integration services and cloud gaming, aiming to jointly explore this emerging market.
The acquisition includes two key agreements between Shenzhen Qianhai Huiying Technology Power, a subsidiary of D&K Asset Management, and Tencent Technology.
The first, the "Cloud Gaming Console Product Cooperation Agreement," focuses on developing game consoles and content through cloud gaming and streaming technologies.
The second, the "Cross-Industry Cooperation Agency Agreement," involves joint marketing efforts targeting Tencent's user base, with events like gaming competitions and talent shows to promote both companies and foster mutual growth.
On the same day, ESHALLGO signed a deal with Beijing Liuliuqiu for 1,000 cloud gaming consoles, leveraging Tencent's resources to develop products supporting multiple cloud gaming services.
The consoles will integrate hardware and network resources, collaborating with platforms like Migu Quick Gaming, Tencent START, Microsoft Xcloud, and GeForce Now, driving growth in the cloud gaming industry.
ESHALLGO CEO Miao Qiwei said, "Through our in-depth cooperation, we will jointly promote the development of the integrated office and cloud gaming sectors, and delivering more convenient, efficient, and diversified service experiences for customers."
Beijing Liuliuqiu Cultural Development added, "Partnering with ESHALLGO is a crucial step in our layout of the cloud gaming and office service sectors. ESHALLGO's extensive experience and capabilities in office integration services will provide us with strong support and after-sales service guarantees."
"At the same time, through ESHALLGO's collaboration with Tencent, we will also benefit from Tencent's powerful resources. We look forward to working hand in hand with ESHALLGO to create an even brighter future together."
Apart from this, Eshallgo and CS Asia Opportunities Master Fund disclosed a landmark equity investment.
Under the agreement, CS Fund will invest up to $20 million in EHGO in tranches, acquiring up to 4.16 million shares at $4.80 per share.
This strategic partnership provides EHGO with strong financial support and fuels its business expansion, reflecting CS Fund's confidence in the company's future prospects.
Price Action: EHGO shares are down 9.82% at $4.50 premarket at the last check Friday.
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