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SHENZHEN, China - Chinese real estate technology company Fangdd Network Group Ltd. (NASDAQ:DUO), currently valued at $13.12 million in market capitalization, announced Tuesday it has entered into an agreement to purchase artificial intelligence technology assets from an unnamed British Virgin Islands company for $34.32 million. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt and a current ratio of 1.66.
The transaction, part of Fangdd’s strategy to expand into technology-enabled real estate management, includes potential earnout payments based on the company’s revenue growth through 2027. These payments would be made in Class A ordinary shares. The company has demonstrated strong revenue growth of 48.3% over the last twelve months, though InvestingPro analysis indicates the stock is currently trading at just 0.25 times book value, suggesting potential undervaluation.
According to the agreement, the seller could receive additional compensation calculated as a percentage of Fangdd’s annual revenue growth: 20% for 2025, 25% for 2026, and 30% for 2027. These earnout payments would be issued as company shares priced at the average closing price over the 30 trading days preceding payment. Subscribers to InvestingPro can access 11 additional key insights about DUO’s financial health and market performance.
Fangdd has three months to secure funding and complete the acquisition. The company may terminate the agreement without penalty if the transaction does not close by December 29, 2025.
The company describes itself as a property technology firm focused on real estate transaction digitalization services in China. It utilizes mobile internet, cloud computing, big data, and artificial intelligence technologies.
Details of the agreement will be filed with the U.S. Securities and Exchange Commission on Form 6-K, according to the press release statement.
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