Hong Kong-based Gome FinTech marks diversification with acquisition of Chinese gaming maker CashBox for $25.6 million

Hong Kong-based financial services platform Gome Finance Technology (Gome Fintech) has revealed plans to acquire Chinese game developer and publisher CashBox Group Technology for HKD200 million ($25.6 million) as part of its strategic diversification.

Gome Fintech’s core businesses include commercial factoring, finance leasing, real estate mortgage lending and lending activities in the Hong Kong region, and the acquisition marks the company’s entry into the artificial intelligence-generated content (AIGC) market.

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

The proposed acquisition of CashBox will be financed through 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, Baron Song, executive director and chief financial officer of Gome Fintech, said at a press conference on Wednesday afternoon.

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

“CashBox is the industry’s leading game developer with top-notch management and R&D teams, invaluable industry insights, professional expertise and extensive resources. We believe the acquisition will create strong synergies for both our company and CashBox,” Song said.

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Following the acquisition, Gome Fintech’s revenue is expected to more than triple to 309.5 million yuan ($42.8) from 82.2 million yuan at the end of 2023, and profits will increase to 54.8 million yuan from 37 million yuan in December, according to Gome Fintech’s listing on the stock exchange on Wednesday.

“Through the proposed acquisitions, the company expects to rely on CashBox’s large and multi-regional user base, combined with the company’s internet technology advantage, to create synergies for the group’s business,” Gome Fintech said in its filing.

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

According to data from Gome Fintech, at the end of 2023, CashBox had over 20 million monthly active users and 126 million total users. CashBox has developed and launched over 200 games.

CashBox users are mainly distributed in countries with high population density, such as the United States, Brazil, India and Indonesia. It has the ability to localize products according to the languages ​​and cultural preferences of individual countries and regions. This is reported to help increase user satisfaction and loyalty.

“We hope to use Gome Fintech’s payment system to connect to our system,” Aaron Li, CEO of CashBox, told The Post at a news conference. “There is huge synergy in this area, which will accelerate our development.”