Hong-Kong listed livestreaming platform Inke Ltd. announced Sunday its $85-million acquisition of the social networking app Jimu, which is known as Hitup: in English and is popular among young Chinese.
The purchase is an apparent effort to woo China’s much-targeted urban under-25s, a demographic known for being significantly more internet-savvy and willing to spend money on entertainment compared with older generations.
Around 80% of all users on Hitup: — which connects users with other people nearby and allows them to chat — are city-dwelling Chinese born after 1995, the announcement said, without specifying Hitup:’s total number of users or downloads to date. The acquisition will help Inke establish a “closed ecological loop” integrating social networking and entertainment for young users, the announcement added.
Despite the purchase, Hitup: has yet to turn a profit. The company’s after-tax losses last year totaled 17.7 million yuan ($2.6 million), nearly three times the 2017 figure of 6.2 million yuan, according to the announcement. Inke said it plans to improve Hitup:’s fortunes by charging membership and advertising fees, but did not provide a timeline.
News of the acquisition was not enough to prevent Inke’s downwardly mobile stock prices, which fell 1.89% to HK$1.56 ($0.20) by Monday’s market close. The same day, the company warned investors that it expected to post losses of up to 60 million yuan for the first half of 2019.
Contact reporter Zhao Runhua (firstname.lastname@example.org)