Following Tencent, a number of A-share listed companies involved in game concepts have joined the "real money" buyback team.
On December 25, the A-share game sector pulled back again, and game companies such as Giant Network, Sanqi Mutual Entertainment, Kaiying Network, and Youzu Network once fell to the limit. At noon on the same day, the chairmen of the two listed companies, Sanqi Mutual Entertainment and Giant Network, proposed to repurchase more than 100 million yuan of shares to enhance investor confidence.
In the evening of the same day, a number of game companies took collective action. Perfect World, Gigabit, Chinese Media and Electric Soul Network respectively announced that they planned to repurchase the company's shares, of which Perfect World proposed to repurchase the company's shares for 100 million to 200 million yuan, and Gigabit and Chinese Media proposed to repurchase the company's shares for 50 million yuan to 100 million yuan. Electric Soul Network proposed to repurchase shares for 20 million yuan to 40 million yuan. Kaiying Network said that the chairman intends to continue to increase his holdings by no less than 100 million yuan.
On the news side, the National Press and Publication Administration issued the "Measures for the Administration of Online Games (Draft for Solicitation of Comments)" on December 22 last week, which triggered extensive discussions in the capital market and also led to a sharp drop in related game stocks such as Tencent and NetEase on the same day.
However, on December 25, the National Press and Publication Administration released a rare pre-market release of 105 newly approved domestic game version numbers, and the number of single approvals exceeded 100 for the first time, covering a wider range of game companies, and continuing to release positive signals to support the healthy development of the online game industry.
The game version is intensively "wholesale", and the plate continues to pull back
On the morning of December 25th, the National Press and Publication Administration released the newly approved version numbers of 105 domestic games. Among them, Tencent's "Counter War: Future", NetEase's "Firefly Assault" and other products are listed. This is the first time that the number of single approvals by the National Press and Publication Administration has exceeded 100, and the scope of game companies covered is also wider.
Just three days ago, on December 22, the National Press and Publication Administration announced a new batch of imported game versions, and a total of 40 new games were approved.
Statistics from the National Press and Publication Administration and the Game Industry Network show that 748 and 512 game versions will be issued in 2021 and 2022, respectively. As of December 25, 2023, 1,075 game versions have been issued, of which 977 are made in China and 98 are imported.
In this regard, the Game Working Committee of the China Audio and Digital Association issued a document on the WeChat public account on December 25, stating that the imported online game version number and the domestic online game version number have been released one after another, which effectively demonstrates the clear attitude of the competent authorities to actively support the development of online games.
On December 23, just one day after the release of the "Measures for the Administration of Online Games" (draft for comments), the relevant person in charge of the National Press and Publication Administration stated that the "draft for comments is based on ensuring and promoting the prosperity and healthy development of the online game industry". Industry insiders said that this timely statement reflects the initiative of relevant departments to respond to public opinion concerns in a timely manner, express attitudes, and clear up doubts, so as to achieve the purpose of stability and boosting confidence.
However, the gaming section is still under a lot of impact.
On December 22, the market value of Tencent Holdings and NetEase, the head game companies, evaporated by about 500 billion Hong Kong dollars, and nearly 20 game stocks among A-share companies, including Sanqi Mutual Entertainment, Giant Network, and Yao Ji Technology, fell to the limit. On December 25, the A-share game sector continued to pull back. As of the close, Giant Network and Kaiying Network fell to the limit, and Sanqi Mutual Entertainment, Yao Ji Technology, and Youzu Network fell by more than 6%.
Gaming companies act collectively
At noon on December 25, Giant Network (002558) announced that Chairman Shi Yuzhu proposed to repurchase 100 million yuan to 200 million yuan. At the same time, Sanqi Mutual Entertainment (002555) also announced that Chairman Li Weiwei proposed to repurchase 100 million yuan to 200 million yuan of shares. It is worth noting that Giant Network and Kaiying Network have all fallen for two consecutive days.
Giant Network said in the announcement that the purpose of the repurchase is to effectively safeguard the interests of shareholders, enhance investor confidence, and effectively improve the return on investment of the company's shareholders. The repurchased shares will be used for employee stock ownership plans or equity incentive plans, which will be implemented by the board of directors in accordance with relevant laws and regulations. If the company fails to use the repurchased shares within 36 months after the completion of the share repurchase, the unused repurchased shares will be cancelled after the relevant procedures are completed.
Sanqi Mutual Entertainment said in the announcement that all the shares repurchased this time will be cancelled to reduce the registered capital, and the upper limit of the price of A-share repurchased shares shall not be higher than 150% of the average trading price of the company's shares in the 30 trading days before the board of directors deliberates and approves the repurchase plan, which is subject to the repurchase plan deliberated and approved by the board of directors and the general meeting of shareholders.
On the evening of December 25, a number of listed companies involved in game concepts in the A-share market joined the buyback army.
Chi Yufeng, the actual controller and chairman of Perfect World, proposed to repurchase a total of 100 million yuan to 200 million yuan, and the implementation period of the repurchase of shares was 12 months from the date of approval of the share repurchase plan by the board of directors of the company.
Lu Hongyan, the actual controller and chairman of Gigabit, also proposed to buy back, 50 million to 100 million yuan. The reason for the buyback is based on the long-term optimism about the high-quality development of China's game industry and the recognition of the company's value, in order to protect the interests of all shareholders of the company, enhance investor confidence, stabilize and enhance the company's value.
Chinese Media is the company's spontaneous plan to repurchase, planning to repurchase 50 million yuan to 100 million yuan, and all the repurchased shares will be used to reduce the company's registered capital.
Electric Soul Network announced that the chairman proposed to repurchase the company's shares for 20 million yuan to 40 million yuan. The repurchased shares will be used for the equity incentive plan.
It is worth mentioning that Tencent has stepped up buybacks after the stock price fell on December 22.
On December 22, Tencent announced on the Hong Kong Stock Exchange that it spent HK$1 billion to repurchase 3.59 million shares on the same day, which means that in the face of emergencies on the same day, Tencent's repurchase efforts have increased significantly, and the repurchase amount is 2.5 times that of the past. According to the data, on December 18, December 19, December 20 and December 21, the amount of Tencent repurchased on that day was: HK$401 million, HK$401 million, HK$403 million and HK$402 million respectively.
According to statistics, as of December 22, Tencent has repurchased 122 times this year, with a total repurchase amount of 46.417 billion yuan. Tencent's repurchase amount this year is unique among Hong Kong stocks, exceeding the total amount of repurchases in the whole of last year, hitting a record high.
Previously, for the "Measures for the Administration of Online Games (Draft for Solicitation of Comments)", Tencent, NetEase and other enterprises stated that they would actively study, feedback and implement, pointing out that the new regulations will not affect the current business model and will continue to practice the high-quality development path of the industry.
CICC believes that the Draft Opinion is intended to make up for the lack of management measures (the Interim Measures were previously abolished in 2019) and aims to promote the prosperity and healthy development of the industry.
Kaiyuan Securities believes that under the guidance of regulatory policies, the game industry may further develop in an orderly manner in the direction of "high-quality and internationalization", and companies with outstanding content innovation capabilities, reasonable payment based on high-quality content and advantages in overseas will have more prominent competitive advantages in the future.
Editor-in-charge: Wang Lulu
Proofreading: Wang Chaoquan