The9 Forms Strong Joint Venture, Targets Profit Growth

The latest report reveals that The9 Limited has established a Joint Venture with Shenzhen JiTuo, aiming for substantial profits. The venture may enhance The9's financial outlook and operational capabilities, potentially influencing its stock performance positively.

Date: 16-12-2024

AI Rating: 7

The report details The9 Limited's new Joint Venture (JV) with Shenzhen JiTuo Interactive Technology Co., Ltd. This strategic move allows The9 to promote its upcoming games more effectively while also potentially boosting its financial results from this new business line.

The JV's structure sees The9 holding a 51% stake, which provides it with a controlling interest. The commitment of over RMB 20 million in annual profit by 2025, alongside an expected profit increase of at least 50% for the two subsequent years, outlines a robust growth expectation. These forecasts could be seen as a strong indicator of future profitability and operational success.

Additionally, the granting of 28.110 million restricted shares to JiTuo, which will unlock in stages based on actual achievements, ties future rewards directly to performance. This performance-based incentive can ensure alignment of interests between both companies while fostering a competitive drive for success.

While specific financial metrics like Earnings Per Share (EPS), Revenue Growth, Net Income, Profit Margins, Free Cash Flow, and Return on Equity are not mentioned, the overall strategic thrust into AI algorithms for mobile advertising, combined with expected profit growth, suggests a generally favorable situation for investors.

Stocks: NCTY