Mobile Phone Games and Digital Applications

China Oil Gangran Energy Group actively exploits other business opportunities so as to make risk diversification and expand income sources. The Group has wholly purchased the 3 Dynamics (Asia) Limited in the hope of expanding the income source.

3 Dynamics Introduction
  1. 3 Dynamics, established in 2004 and registered in Hong Kong, is mainly focused on developing business of mobile phone games and digital applications.
  2. 3 Dynamics is a company with great creativity and has taken the lead in implantation of advanced technology into 3G games. Its 3G game products of "3G Mopas" and "Hong Kong War" have received 3G Cyberport Awards from Hong Kong Wireless Technology Industry Association (HKWTIA) in 2006. And the "3G Mopas" has also received Hong Kong Information and Communication Technology Award (HKICT) in November of the same year.
  3. Up to 2009, 3 Dynamics has successfully developed over 60 mobile programs applicable to all platforms, which have been sold abroad and have different language versions.

3 Dynamics website: www.3dynamics.com


Game Characters
Project Advantages:
  1. 3 Dynamics has successfully developed over 60 mobile programs and gaming products, and has received a number of science and technology awards;
  2. 3 Dynamics will enter the promising mobile phone game market of mainland China, and has received the resources of animation and cartoon characters from partners to be used as game design materials;
  3. The company value of 3 Dynamics has been measured and calculated by a professional valuer, and its purchase by the Group has also been offered "The Seller's Profit Guarantee Clause" as a guarantee.

3 Dynamics is expanding its business scope recently, including providing design and development service of mobile games with Chinese popular cartoon characters. It has signed an cooperation agreement with a professional 3-dimensional animation studio (the "Animation Studio"), pursuant to which the Animation Studio shall: (i) exclusively authorize and provide its animation works and cartoon characters to 3 Dynamics; (ii) work as the exclusive worldwide distributor of the Game Consoles, for a period of 5 years and extendable for further 5 years whereby 3 Dynamics shall use such materials to develop and manufacture mobile games. The Animation Studio, which is licensed to produce broadcasting and television programs and registered to, inter alia, produce and distribute television programs and animation programs in the PRC, has completed over 32,000 minutes of original 3-dimensional animation works and owns over hundreds of patented cartoon characters and works which have been broadcasted on China Central Television and over 70 major TV channels in the PRC.

Taking a positive view on the business prospects of 3 Dynamics, the Group believes that the acquisition can further improve the Group's profitability. The purchase price shall be considered carefully by the buyer and the seller as well, which includes: (i) The Valuation Report dated 19th November 2013 prepared by the valuer showing that the market value of 3 Dynamics was approximately HK$175.2 million as of 15th November 2013 based on the discounted cash flow method under income approach; (ii) the Profit Guarantee, which means after 12 months of purchase, the net profit of 3 Dynamics after tax shall not be less than HK$42 million. The seller shall fulfill the profit guarantee so as to secure the purchase cost of 28 million stakes. (iii) The business and growth prospects of the seller's company after the acquisition.