Hong Kong-based Gome FinTech marks diversification by acquiring Chinese game developer CashBox for US$25.6 million

Hong Kong-based financial service platform Gome Finance Technology (Gome Fintech) has unveiled plans to acquire Chinese game developer and publisher CashBox Group Technology for HK$200 million (US$25.6 million) as part of a strategic diversification.

Gome Fintech’s core businesses include commercial factoring, financial leasing, real estate mortgage loans, and money lending business in the Hong Kong region and the acquisition will mark its entry into the business of artificial intelligence generated content (AIGC).

The gaming sector has become an important part of the financial services market with huge growth potential and business opportunities, according to a filing by Gome Fintech. “The new technology of AIGC is becoming an important technological turning point, bringing revolutionary changes to the game development process, and AIGC game stocks are seen as having huge potential investment value.

The proposed acquisition of CashBox will be financed by the issuance of new shares by Hong Kong-listed Gome Fintech, and the financial services platform aims to complete the acquisition by the end of the month, said Baron Song, executive director and chief financial officer of Gome Fintech, at a media briefing on Wednesday afternoon.

“The acquisition of CashBox is the first step in Gome Fintech’s strategic transition and in preparation for globalisation,” said Song.

“CashBox is a leading game developer in the industry, with top-notch management and research and development teams, invaluable industry insights, professional knowledge and abundant resources. We believe that the acquisition will create strong synergies for both our company and CashBox,” said Song.

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After the acquisition, Gome Fintech’s revenue is expected to more than triple to 309.5 million yuan (US$42.8) from 82.2 million yuan at the end of 2023, while profits are expected to grow to 54.8 million yuan from 37 million yuan in December, according to Gome Fintech’s filing to the stock exchange on Wednesday.

“The company expects, through the proposed acquisitions, to rely on the large and multiregional user resources of CashBox, combining with the company’s advantages in internet technology, to create synergies for the group’s business,” according to Gome Fintech in the filing.

Founded in 2018, CashBox’s business model is to attract potential users through promotion on social and video platforms, and then earn revenue through advertising and in-app-purchases.

As of the end of 2023, CashBox had over 20 million monthly active users and 126 million accumulated users, according to Gome Fintech’s filing. CashBox has developed and launched over 200 games.

Users of CashBox are mainly distributed in countries with high population density, such as the United States, Brazil, India and Indonesia. It has the ability to localise products according to the languages and cultural preferences of individual countries and regions. This helps improve user satisfaction and loyalty, according to the filing.

“We hope to leverage on Gome Fintech’s payment system to link with our system,” Aaron Li, CEO of CashBox told the Post at the media briefing. “There is great synergy in this area, and this will accelerate our growth.”