The9 Limited (NCTY, Financial) has announced a joint venture agreement between its wholly-owned subsidiary, Shanghai The9 Information Technology Co., Ltd., and Chengdu Qing Cheng Network Science and Technology. The latter specializes in mobile game operations and distribution for the Chinese market. Under this agreement, The9 Limited will hold a 51% stake in the joint venture, while Chengdu Qing Cheng will hold 49%. This venture aims to become The9's flagship subsidiary for mobile game operations and distribution in China.
Chengdu Qing Cheng Network Science and Technology plans to leverage its unique distribution channels in emerging markets to operate various mobile games for the joint venture. The company has committed to ensuring that the joint venture's annual profit exceeds 80 million RMB (approximately $11 million) by 2025. Furthermore, it expects profits to grow by at least 50% annually in 2026 and 2027.
As part of the agreement, The9 Limited will grant Chengdu Qing Cheng 110.2 million restricted shares, equivalent to 367,442 American Depositary Shares. These restricted shares will be unlocked in phases, contingent on the joint venture achieving its profit targets.
