The century-old store is sold! Tens of billions of transactions, do you want to play games instead of soy sauce?

The 118-year-old soy sauce shop has been sold.

A second- and third-tier gaming company with more than 10 years of experience was bought for tens of billions.

A well-established fund with tens of billions of dollars under its management was making mistakes while shipping goods.

On September 11, Xinchen Capital, a subsidiary of CITIC Capital, announced that it would sell 100% of its shares in Taoda Food, a century-old Hong Kong condiment brand, to Haitian Flavors, a leader in the domestic condiment industry. The parties have not announced the transaction amount.

After Xinchen completed the holding acquisition of Taoda in 2019, it took multiple measures to restore its stable profitability.

After the completion of this transaction, Xinchen successfully exited.

Taoda Food was founded in 1908 and is a 118-year-old soy sauce store.

According to its official website, Taohua Company was first registered and established in Gulangyu Island, Xiamen. It merged with Datong Company in 1927, hence the name “Taohua”. In 1929, the company set up a factory in Nguchiwan, Kowloon, Hong Kong.

In the nearly 100 years since then, this old soy sauce brand has changed hands several times.

In 1991, Taoda entered the French Danone Group system.

In 2006, Japan’s Ajinomoto acquired Taoda.

In November 2018, Ajinomoto announced that it would transfer 100% of the equity of Taoda Food to a platform owned by CITIC Capital. The relevant transaction was completed in 2019.

Now, Taoda has changed hands again, and the new owner has become Haitian.

In fact, Xinchen Capital has been looking for a buyer for Taoda for several years.

In 2023, market news once stated that Xinchen Capital was seeking to value Taobao at approximately US$300 million, and the highest potential transaction price had been pushed to US$300 million to US$400 million.

Chen Capital, as a well-established private equity institution, has completed more than 100 investments over the past 20 years, of which more than 70 were holding mergers and acquisitions.

Just a month ago, Xinchen took over the gaming company Lingxi Interactive Entertainment from Alibaba for 10.1 billion yuan.

Alibaba has shifted its strategic focus to AI and cloud computing, and the synergy effect that its gaming business can exert is increasingly weakening.

In fact, Lingxi Interactive Entertainment’s annual net profit is still 1.5-2 billion yuan, and Xinchen took over the deal for 10.1 billion yuan, corresponding to a price-to-earnings ratio of about 5-7 times. In the game industry where PE is often dozens of times higher, it is extremely cost-effective.

On August 17, Lingxi Interactive Entertainment CEO Zhou Bingshu issued an internal letter confirming that the total transaction price exceeded US$1.5 billion (approximately RMB 10.1 billion), making it the largest equity merger in the domestic gaming market in 2026.

This means that Lingxi Interactive Entertainment has officially separated from Alibaba and started a new stage as an independent game company.

Nine years ago, Alibaba spent about 1 billion to acquire “Jianyue Technology”, the predecessor of Lingxi Interactive Entertainment. The subsequent hit “Three Kingdoms: Strategy Edition” became the cash cow of Alibaba Games.

When Alibaba wanted to sell, Lingxi Interactive Entertainment once sparked a bidding war.

Since Alibaba officially launched the bidding for the asset sale of Lingxi Interactive Entertainment in June 2026, many A-share listed companies and PEs have competed.

Such as Sanqi Interactive Entertainment, China Ruyi, Century Huatong, Giant Network, Xinchen Capital and a consortium composed of two anonymous PEs, etc., it can be called one of the most fierce battles in the game industry of the year.

What is worth pondering is that after breaking up with Alibaba, Lingxi Interactive Entertainment also said goodbye to a classic IP.

“Travel Frog·China Journey”, represented by Lingxi Interactive Entertainment, recently announced that due to the expiration of the IP licensing cooperation, the game will officially cease operations on December 8, 2026.

The announcement copy refers to this as “the little frog is going on a long journey and has no return date.” The “no return date” includes not only the little frog in the game, but also some players’ recharge funds.

The popularity of this phenomenal placement game can be traced back to 2017:

“Travel Frog” developed by Japan’s Hit-Point Company was launched on Android and iOS platforms that year, and then quickly became popular on Chinese social media. 2

In May 2018, the Chinese version of “Travel Frog” “Travel Frog·Journey to China” began internal testing.

But after the highlight, the subsequent operations of the game gradually languished.

Jiguang Big Data shows that the number of daily active users of the “Travel Frog” game in China reached a peak of 7.63 million at the end of January 2018.

But by the end of June 2018, daily active users had plummeted to 126,600, a 98% drop from the peak.

Compared with the wave of mergers and acquisitions in the gaming industry in previous years, is it worth spending tens of billions to acquire a gaming company?

As a fund company, can Xinchen bring advantages to the gaming industry?

In the current macroeconomic environment, are the cash flows of invested companies such as consumption and gaming still stable?

In this regard, “21st Century Business Review” reporter Qin Yi and Shu Le had some exchanges. I think:

You don’t make much money playing soy sauce, but you can go into the city outside the Fifth Ring Road to play games.

CITIC Capital wanted to enter the gaming industry more than ten years ago, but failed. However, more than ten years later, gaming is still a strong money-drawing industry.

For capital institutions, although Lingxi Interactive Entertainment is an abandoned son of Alibaba, for outsiders, it is a hotpot that can make money with multiple relatively stable money-making games and IP that can be further explored.

For the “barbarians at the gate” who have been obsessed with the game for many years, this tens of billions ticket is not expensive and is a great value.

On the contrary, the expectations that major game companies have for Lingxi Interactive Entertainment’s performance and prospects can only be regarded as useless. Being blocked by capital institutions is a kind of “let it go” mentality in the industry.

After the capital acquires game companies, it may continue the blood transfusion that Alibaba has cut off, and promote Lingxi Interactive Entertainment to find a way to “enter the city” from “game manufacturers outside the Fifth Ring Road”.

Of course, as a capital side, Xinchen Capital’s biggest concern at the moment is to obtain assets and IP, but the game development and operation personnel have been lost.

For game manufacturers, this loophole can still be filled.

But for capital parties without game operation experience, they will fall into a period of hiatus.

As a neutral PE, perhaps the biggest advantage of Xinchen is that it has no historical burden and can freely inject funds into the purchased game companies and quickly improve its game technology research and development capabilities.

However, no matter how you look at it, acquiring a stable gaming company is a good deal.

As long as a game company is on track and has mature IP and games, its overall revenue will be relatively stable before the game enters a period of decline.

And as long as there is a relay of game renewals, the overall stability and gradual improvement can be guaranteed.

The game products on hand at Lingxi Interactive Entertainment are still in the upward stage, especially the revenue capacity of “Three Kingdoms: Strategy Edition” is very considerable, and there is no problem with cash flow.

As for the shut down “Traveling Frog”, it is already a piece of cake. Whether it survives or not will have minimal impact on the company as a whole.