B.Duck Semk Holdings International Limited (2250) announced supplemental details regarding a discloseable transaction involving a share acquisition and convertible loan investment related to the Yincang Waou group of companies. The transaction encompasses the issuance of consideration shares under a general mandate and stipulates performance guarantees, a compensation mechanism, and a lock-up arrangement on certain shares.
Yincang Waou recorded revenues of RMB15.25 million in 2023 and RMB26.26 million in 2024, reflecting growth rates of 275.9% and 72.2%, respectively. For the first six months of 2025, Yincang Waou reached RMB15.28 million in revenue, representing a 78.9% increase over the same period last year. The performance guarantee for 2025, 2026, and 2027 is devised based on Yincang Waou’s historical sales figures, overall industry projections, and ongoing growth momentum.
Under the compensation mechanism, if the established performance targets are not met, the value of Mr. Huang’s equity interest in Yincang Waou and an agreed cash compensation will be assessed. The arrangement includes an escrow account for the consideration shares issued to Mr. Huang, which will remain locked for 12 to 36 months. Should the performance thresholds be unmet, part of these shares could be sold to cover any shortfall in total compensation.
A valuation report on 31% equity interest in Yincang Waou was prepared using the market approach with an EV/Sales multiple. Six comparable companies were examined; the final valuation applied the median multiple of 6.49. The Company conducted due diligence on Yincang Waou’s business, finance, and legal aspects, including a review of financial statements, IP licensing agreements, and sales contracts. The Board considers the valuation and consideration of the transaction fair and reasonable in light of Yincang Waou’s historical performance and growth potential.
Upon completion of the share acquisition, the Cayman Company controlling Yincang Waou will become an indirect non-wholly-owned subsidiary of B.Duck Semk (2250), with the latter holding board control. The Company intends to integrate Yincang Waou’s expertise in trendy toys, IP licensing, and product development to strengthen revenue and expand the existing IP matrix. Further, the Company’s future plans include overseas channel development, expansion of IP types, and diversification of product categories, seeking to leverage Yincang Waou’s experience for broader market reach and accelerated business growth.