B.Duck Semk Holdings International Limited (“B.Duck Semk”, together with its subsidiaries, the “Group”, stock code: 2250.HK), the largest domestic character Intellectual Property (IP) company in China engaged in the provision of licensing services, design consultation services and retailing of licensed brand products of its original B.Duck family characters, has entered into a Memorandum of Understanding (“MoU”) with the Public Investment Fund of Saudi Arabia (“PIF”) on 28 July 2023. According to the MoU, the Group will collaborate with PIF Asia Division in the form of investment, project and brand development. The total investment amount, which will be wholly funded by PIF, is estimated to be US$250 million (equivalent to approximately HK$1.96 billion).
Mr. Hui Ha Lam, Chairman and Chief Executive Officer of B.Duck Semk, said: “We are honored to have entered into the MoU with PIF Asia Division, one of the largest and most influential sovereign wealth funds in the world, and we are grateful for the recognition from PIF Asia Division. As the largest domestic character IP in China, we are experienced in the character licensing business and IP management. With PIF’s financial support and its extensive network and resource advantages in around the world, we believe the cooperation will create synergies leveraging the respective strengths of both parties, allowing us to seize the immense opportunities in the Southeast Asia and Middle East IP market and achieve mutual success.”
PIF is the sovereign wealth fund of the Kingdom of Saudi Arabia, with asset under management amounting to US$620 billion at present. Driven by Saudi Arabia’s ‘Vision 2030’ national transformation program, the share of PIF’s overseas investment has been increasing and is expected to reach 50% by 2030. In recent years, PIF has been actively investing in China, selecting projects that are leaders in the respective industries and innovation, and have growth potential in their industries, assisting the invested companies in achieving industry consolidation. PIF’s global investment remit is wide, including but not limited to communication technology, real estate, financial services, gaming, e-sports and leisure consumption. Such corporate network and resources are crucial for B.Duck Semk to enter global markets. Through the cooperation with PIF Asia Division, the Group can also benefit from the strategic advantages to accelerate its new market development.
According to the MoU, PIF Asia Division plans to invest in the Group in three aspects: firstly, it intends to provide US$50 million in financing to the Group, by way of project financing, subscription of convertible securities , and other means with a period of five years; secondly, it plans to invest in the Group’s expansion in overseas entertainment and tourism projects, including the joint development of B.Duck entertainment parks and hotels, with an investment amount of US$200 million; and thirdly, it plans to serve as the brand agent of B.Duck IP in the Middle East region.
With the global pandemic abating and economic activities recovering, physical entertainment activities and the IP cultural and tourism have become the key development focuses of the Group. PIF Asia Division plans to invest US$200 million in the Group’s overseas entertainment and tourism projects. In addition to the Middle East, the parties plan to jointly develop the B.Duck theme entertainment parks and hotels in Thailand and Southeast Asia, further enhancing B.Duck’s brand influence and IP market penetration in these markets. In fact, the Group has already established a solid business foundation in Southeast Asia, especially in Thailand. It has recently established a subsidiary in Thailand, which focuses on operating an e-commerce and licensing business there.
According to a market survey, Thailand’s e-commerce market will expand at a compound annual growth rate of 23% over the next three years, reflecting accelerated growth speed as well as significant business opportunities. At present, Thailand is B.Duck Semk’s largest overseas licensing region. The Group plans to export its own e-commerce business and domestic products developed by licensing customers to Thailand first, and strives to replicate its successful domestic business model in the Southeast Asia market. On this basis, the Group plans to invest more resources in location-based entertainment licensing projects, such as theme entertainment parks and hotels in Thailand and Southeast Asia. The cooperation with PIF allows the Group to increase the coverage of B.Duck IP, and achieve the strategic development goals of quickly expanding fan base and accelerating monetization momentum.
In addition, a market survey had shown that the total retail sales of character licensing products worldwide in 2022 amounted to approximately HK$2,663.5 billion, of which more than 60% were licensed products in North America, and only 1% in the Middle East and Africa, demonstrating strong growth potential in the Middle East market. As the largest domestic character IP licensing company in China, B.Duck Semk has high brand awareness, with more than 20 million subscribers or followers worldwide, and over 1 billion views of all kinds of content related to the B.Duck family characters. The Group also has strong capability in character design and a mature character licensing business model. So far, it has launched more than 1,200 style guides and more than 36,000 SKUs. Through expansion into the Middle East IP market, the management strongly believes that the Group can give full play to its leading advantages and become the “leading force” in exporting Chinese IPs overseas. PIF Asia Division ‘s significant investment in the Group has provided impetus to the Group’s long-term vision of demonstrating the soft power of Chinese culture to the world.
Mr. Hui concluded, “We will strive to explore this new market and create new opportunities, and PIF will be an important strategic partner for B.Duck Semk to enter the Middle East market for the first time. Going forward, the Group’s development blueprint for the next three years will center on ‘refining our workmanship, strengthening our position’. Through ‘horizontal’ and ‘vertical’ initiatives, we will strive to achieve resource integration and synergies with upstream and downstream players and industry peers. Vertically, the Group will actively develop cross-border e-commerce, fully integrate online – offline businesses, and increase market channels. Horizontally, the Group will expand its high-quality IP matrix via its own development and incubation efforts, acquisitions, engagement with licensing agents, etc. Overall, the group will expand the channels and scenes related to IP operations and actively deploy funds from this financing to establish a strong presence in various fields such as theme parks, pop toys, gaming, and cultural tourism. We believe the cooperation with PIF Asia Division will be an extremely important milestone to press toward the strategic goal of becoming ‘a high-quality integrated IP company’.”
About B.Duck Semk Holdings International Limited
B.Duck Semk Holdings International Limited (stock code: 2250.HK) is the largest domestic character IP company in China engaged in the provision of licensing services, design consultation services and retail of brand products of its self-created B.Duck family characters. With strong in-house artistic design capabilities, B.Duck Semk has developed and nurtured a proprietary portfolio of approximately 25 self-created characters created under the motto of “Be Playful”. B.Duck family characters had recorded in aggregate more than 20 million subscriptions or follows by B.Duck fans on various e-commerce platforms and social networking platforms, and over 1 billion views of all kinds of content related to the B.Duck family characters.
According to the “Top Brand Licensing Agents 2023” report published by License Global, B.Duck Semk has achieved approximately US$500 million in retail sales for its original and the licensed brands represented by B.Duck Semk, ranking 21st globally. B.Duck Semk has received the “Asian Property of the Year” awards by Licensing International from 2016, 2018, 2019, and 2020, as well as the “China Property of the Year” award in 2021.
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