Zhitong Finance App News, on July 31, Jin Jing Xinneng (01783) issued an announcement announcing that the operating company it plans to acquire has signed a binding service agreement with a major Chinese technology manufacturer. The service contract is expected to generate additional annual profit before interest, tax, depreciation and amortization within the 5-year period of the agreement, not less than RMB 480 million and a total contract value of not less than RMB 2.4 billion. This move means that the key financial conditions for the third instalment payment in the acquisition transaction have been met, and the profitability of the target company has been verified in advance, providing substantial support for the company's strategic transformation into the field of AI computing power infrastructure.
According to the company's earlier disclosure, Jin Jing Xinneng plans to acquire target shares (that is, the entire issued share capital of the target company YV CLOUD Limited and the operating company Shanghai Youfu Cloud Computing Co., Ltd.) from the seller Yovole Cayman, at a maximum cost of no more than HK$2.5 billion. Among them, Target Group is mainly engaged in providing cloud computing services, currently provides such services, and Target Group now holds the relevant licenses required to provide such services. The operating company has established extensive networks and contacts in the field of Internet data centers and cloud computing, and is qualified to purchase the high-performance GPUs required for its cloud computing services.
As a condition of the third instalment payment, the operating company must (among others) obtain a binding service agreement or cooperation agreement, and the operating company shall generate an additional annual profit of not less than RMB 480 million before interest, tax, depreciation and amortization during that year, and generate a total contract value of not less than RMB 2.4 billion (profit before interest, tax, depreciation and amortization and contract value target) during the term of such agreement. However, the signing of this large computing power lease agreement directly met the financial prerequisites corresponding to the payment of the third phase of the acquisition, fully confirming the long-term investment value of this computing power asset acquisition from the business side.
Overall, winning the contract with a major manufacturer is not only an important milestone in Jinjing Xinneng's acquisition transaction, but also marks a substantial step in the transformation of the company's AI computing power service business. With the successive completion of subsequent acquisition conditions, Jinjing Xinneng is expected to develop full-life cycle business in the AI computing industry, achieve collaborative development between the two main industries of green energy and digital computing power, and further open up room for valuation imagination.