(Yicai Global) Aug. 10 -- Shares of Mingchen Health jumped after the Chinese personal care products supplier said that it is spending CNY261 million (USD37.5 million) to enter the gaming sector via two acquisitions as a strategic shift amid the Covid-19 pandemic.

Mingchen's stock price [SHE:002919] rose by the daily limit of 10 percent to CNY22.68 (USD3.30) today. That means that its shares have risen by nearly half this year.

The hair products maker has penned equity transfer agreements to buy Hainan province-based Huaduo Network Technology for CNY132.6 million and Hangzhou's Leiyan Network Technology for CNY128.7 million, the Guangdong province-based buyer said in a statement yesterday.

Online games have become a popular source of entertainment amid the Covid-19 pandemic and gaming companies are expected to keep on growing after the outbreaks are contained, whereas Mingchen's personal care products business is facing increasing competition and bottlenecks in business development, said the parent.

Huaduo runs two games, including mobile release Wangzhe Guodu, which has logged more than CNY100 million in monthly revenue for many straight months, the firm added. Leiyan's popular release Bailong Baye, launched in late 2019, has also made more than CNY100 million in a single month.

The acquisitions should help the parent improve its profitability while enhancing the two game developers' influence, Mingchen added.

Editor: Emmi Laine