ZW Data Action Technologies, Inc. (“ZW Data” or the “Company”), an integrated online advertising, precision marketing, data analytics, and other value-added services company, announced that it has signed a letter of intent (“LOI”), and has formally proposed an acquisition offer to Henan Baodun Information Technology Co., Ltd (“Baodun”). Pursuant to the LOI, the offer price and terms will be negotiated and determined upon completion of due diligence, and the completion of the transaction is envisaged in the fourth quarter of 2022. Upon the completion of the acquisition, Baodun will become a wholly-owned subsidiary of the Company, and will remain its independency in operation to provide one-stop eCommerce marketing service solutions and full agency operation services for customers.

Baodun is a full-service internet marketing company integrating content marketing, advertising effect optimization and brand marketing. Baodun has the comprehensive agency qualification like ByteDance and Kuaishou, and can provide internet advertising and marketing resources on multiple client side product platforms, including but not limited to toutiao.com, ixigua.com, TikTok and Kuaishou. Its major cooperating clients include SF Express, Belle, and Tongrentang. Baodun generated approximately $50 million in annualized revenue in 2021 and expects to continue growing with a double digit’s growth rate this year.

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The strategic acquisition of Baodun is intended to enhance ZW Data’s competitiveness within the industry and especially in the short video platform market. The addition of Baodun, together with the Company’s current expertise in advertising, would significantly improve the Company’s strengths in short video advertising, merchandising and promotion business areas, and expand the social eCommerce business to onboard a new growth point. The Company expects that this acquisition will drive a meaningful increase in short and long-term ZW Data’s revenue.

“We are excited to announce this planned acquisition of Baodun. The short video market has expansive development prospect, and nowadays, social media platforms such as TikTok and Kuaishou have billions of users domestically and internationally. The elite veterans of Baodun are primarily located in Zhengzhou, Henan Province and Guangzhou, Guangdong Province. We are extremely thrilled that the founder of Baodun, Ms. Ning Lv, as one of the most experienced ECommerce operators in China, will join the Company with the management team upon the completion of the transaction. The addition of the new team will accelerate the development of our short video merchandising capabilities and reinforce our commitment to building a leading merchandising enterprise in China. We believe that this acquisition will drive the diversification of our business, form a new profit growth point, and enhance the profitability to bring near and long-term values for shareholders,” commented Handong Cheng, Chairman and Chief Executive Officer of ZW Data.

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