Sealand Capital (SCGL.L) Formation of new Joint Venture

Sealand Capital Galaxy Limited (LSE: SCGL) (“Sealand” or “the Company”) is pleased to announce that it has formed a joint venture company, Tengwuyang Holdings Limited (“Tengwuyang”), together with Tenet. The purpose of Tengwuyang is to create a new path for foreign merchants to sell their goods and services into the Chinese market.

Tenet is a subsidiary of Tencent – DaiYueWang , a certified MCN (Multi Channel Network) institution. DaiYueWang is a website with a large Chinese user base and is ultimately owned by Shenzhen Tencent Computer System Co. Ltd and the Nanfang Media Group. Tenet is an experienced short videos producer driving market trends in mainland China and has been working with Sealand’s subsidiary, New Sky Global Media Limited, since 2019. Together, Tenet and New Sky Global Media have rendered short video production services, helping multi-national companies to enhance and raise their brand images in China.

It is estimated that the market size of short video mobile applications (“short video apps”) in China will reach RMB 38 billion in 2020 according to research done by iiMedia Research . Sealand and Tenet are using their existing connections and resources to set up Tengwuyang, helping to accelerate Sealand’s business development plan in the short video apps market and helping clients to expand their businesses in China as efficiently as possible.

Tengwuyang is a one-stop advertising solution provider offering services to foreign merchants wishing to launch their goods and services into the Chinese market. Tengwuyang does this by taking advantage of the rise in popularity of China’s short video mobile platforms, such as Douyin (known as TikTok elsewhere in the world) and Kuaishou, with over 400 million and 216 million daily active users respectively. The method of achieving success for clients is to create short but original and popular videos on Douyin and Kuaishou to suit the client’s brand image, as well as managing and organizing promotional activities to help clients build up and advertise their brands in China.

These short videos are also released together with brand and product information and other services on the mainstream online video platforms in China, including the full range of Tencent advertising channels such WeChat Moment, Tencent Video and Weibo, to create consumer momentum in China. Tengwuwang also harnesses the substantial rise in popularity and effectiveness of social influencer/KOL (Key Opinion Leader) marketing in China, where internet celebrities sell branded products online through live-streaming.

Tengwuyang can also help foreign merchants to develop B2B supply chain networks. Using various well-known China e-commerce platforms, Tengwuyang’s clients can sell their commodities in the Chinese market with fewer start-up costs and less manpower. It offers a comprehensive way for overseas merchants to tap into the Chinese market, especially the Chinese e-commerce market. Following the establishment of embedded e-commerce functions in short video apps in 2019, Tengwuyang is next planning to embed advertising into the story plot of short videos, directing viewers to purchasing pages. This will all be embedded within the same app used by the consumer.

Nelson Law, Executive Chairman of the Company, commented:

“We are very excited about the JV we have set up with our trusted partner, Tenet, which has an extremely strong offering in the short video apps market. We can leverage their skill sets to provide a digital bridge between Chinese consumers and foreign merchants.

“We are now actively marketing to local brands across the United Kingdom, especially those which have not been sold in China to date and are looking to access that lucrative and large market. Local brands in the United Kingdom are very popular among Chinese consumers because of their reputation for quality and relative rarity. We are excited to provide new ways for brands in the United Kingdom to access the Chinese market by using our offering which is low risk, resource light and cost effective.”

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