The9 (NCTY) Q4 2025 earnings summary

Executive summary

• Entered into a share purchase agreement on July 22, 2025, to acquire the remaining 49% of Shenzhen Shuzhi Technology Co., Ltd. from Shenzhen gNetop Interactive Technology Co., Ltd. for RMB 75 million, split between cash and restricted shares, contingent on profit targets.

• The agreement supersedes prior joint venture agreements, consolidating 100% ownership of Shuzhi under the acquirer.

Significant events and developments

• The first batch of 66,356,400 Class A shares (RMB 15 million value) was issued in 2025; subsequent cash and share payments are contingent on Shuzhi achieving net profit after tax of at least RMB 20 million in each of the next two operational years.

• If profit targets are not met in a given year, the corresponding payment and share issuance are deferred, but can be triggered in subsequent years if targets are later achieved, up to a maximum five-year period.

• Any shares not released from lock-up due to unmet targets by the end of the five-year period are forfeited and cancelled.

• The seller (Shenzhen gNetop) and its CEO, Guo Yang, have agreed to transfer all overseas business operations to the acquirer and are subject to non-compete and CEO retention covenants.

Capital allocation and financing

• The RMB 75 million consideration is split: RMB 30 million in cash (paid in two installments, each contingent on profit targets) and RMB 45 million in restricted Class A shares (issued in three batches, also contingent on profit targets).

• The agreement includes mechanisms for share cancellation if performance targets are not met.