From Virtual Agents to Embodied and Industry-Specific AI: BGM Acquires Xingdao Intelligent and YD Network, Advancing AI on Two Fronts

Rhea-AI Summary

BGM Group (NASDAQ: BGM) has announced the acquisition of two companies: Xingdao Intelligent and YD Network for a combined valuation of RMB800 million. The deal will be executed through the issuance of 37,123,142 Class A ordinary shares at $3.0 per share, with the acquired companies' shareholders collectively holding 15.6% of BGM's total outstanding share capital post-completion.

Xingdao Intelligent is a leading Chinese manufacturer of embodied service robots with over 300 patents, specializing in robotics hardware systems and AI-powered services for restaurants, retail, building management, hospitals, and industrial inspections. YD Network focuses on intelligent stock trading through AI, offering services like stock selection, trading strategy optimization, and risk management for various investors in U.S. markets.

The acquisitions, expected to close by June 2025, align with BGM's strategy to enhance its multi-agent AI productivity platform and expand its capabilities across hardware-software integration and industry-specific AI applications.

Positive

• Strategic expansion into embodied robotics and fintech AI through dual acquisitions
• Access to Xingdao's portfolio of 300+ patents in service robotics
• Diversification of revenue streams through entry into multiple industries (restaurants, retail, healthcare, financial markets)
• All-stock transaction preserves cash resources
• Integration of hardware and software capabilities enhancing BGM's AI ecosystem

Negative

• 15.6% shareholder dilution from new share issuance
• Integration risks managing two different companies simultaneously
• Potential cultural and operational challenges merging Chinese and U.S. market-focused businesses

Insights

AI and Technology Investment Analyst

BGM's dual acquisitions expand its AI capabilities into embodied robotics and fintech, strengthening its multi-agent AI strategy while diluting existing shareholders by 15.6%.

BGM Group's RMB800 million acquisition of Xingdao Intelligent and YD Network represents a strategic expansion of the company's AI capabilities in two distinct directions. The all-stock transaction—involving 37,123,142 newly issued Class A shares at $3.0 per share—will result in 15.6% ownership dilution for existing shareholders once completed.

Xingdao Intelligent brings substantial hardware expertise with over 300 patents in service robotics, providing BGM the critical "perception-understanding-execution" capability needed for real-world AI applications. This acquisition transforms BGM from a purely virtual AI company into one with physical embodiment capabilities across multiple industries including restaurants, retail, building management, healthcare, and industrial sectors.

The YD Network acquisition gives BGM specialized fintech AI capabilities, particularly in quantitative trading algorithms with proven success in U.S. stock and options markets. This vertical expansion into financial markets complements BGM's existing business while opening new revenue streams.

These acquisitions accelerate BGM's "multi-agent AI productivity platform" strategy by creating a more comprehensive ecosystem spanning marketing, labor, and capital markets. The company is clearly positioning itself beyond general-purpose AI and toward industry-specific implementations where specialized domain knowledge creates competitive barriers.

The transaction structure—using equity rather than cash—suggests BGM is leveraging its stock as acquisition currency while preserving cash reserves. This approach aligns the interests of the acquired companies with BGM's long-term success, though the 15.6% dilution is substantial and existing shareholders will need to see proportionate growth to maintain equity value.

$111.4 million valuation (converted from RMB800 million) for companies with specialized IP and market penetration appears strategic rather than opportunistic, focusing on capabilities rather than immediate financial returns.

CHENGDU, China, May 28, 2025 /PRNewswire/ -- BGM Group Ltd. (the "Company" or BGM)  (NASDAQ: BGM) today announced that it has entered into definitive transaction agreements with the existing shareholders of Xingdao Intelligent Cloud Chain (Shenzhen) Co., Ltd. ("Xingdao Intelligent") and YD Network Technology Company Limited ("YD Network"). Under the terms of the agreements, BGM will acquire 100% of the equity interests of both companies at a combined valuation of RMB800 million. The consideration will be paid through the issuance of 37,123,142 newly issued Class A ordinary shares of BGM at a price of US$3.0 per share. The transactions are expected to close by the end of June 2025, subject to customary closing conditions. Upon completion, the shareholders of Xingdao Intelligent and YD Network will collectively hold approximately 15.6% of BGM's total outstanding share capital.

Xingdao Intelligent is a leading manufacturer and operator of embodied service robots in China. The company has developed proprietary robotic hardware systems and foundational algorithms, positioning itself as a key builder of intelligent workforce systems that integrate embodied robotics, multi-robot product suites, and AI-powered scenario-based services. With over 300 patents related to service robotics, Xingdao Intelligent has a significant presence in areas such as mechanical design, intelligent perception, and autonomous decision-making. The company's products are widely applied in industries including restaurant services, retail malls and supermarkets, building management, hospitals, and industrial inspections. The acquisition will enable BGM to deepen its AI capabilities by integrating hardware and software, completing the "perception-understanding-execution" cycle in real-world applications.

YD Network is a pioneering company dedicated to advancing intelligent stock trading through AI. Through its proprietary financial models and quantitative algorithms, the company offers services such as intelligent stock selection, trading strategy optimization, and risk management. Its solutions are used by a range of investors, including individual traders, investment banks, and private equity firms, with a significant successful  track record in the U.S. stock and options markets. By acquiring YD Network, BGM will expand its AI capabilities into the fintech sector, building a cross-industry intelligence ecosystem that spans marketing, labor, and capital markets, unlocking new growth avenues.

Chen Xin, Chief Executive Officer of BGM, commented, "We believe the future of AI lies in multi-agent collaboration—across both virtual and physical domains, and into deep vertical applications. The acquisitions of Xingdao Intelligent and YD Network represent two major breakthroughs for us: one in embodied intelligence and the other in industry-specific AI applications. This will not only enhance our AI workforce platform but also open up a new frontier in stock and capital markets. These moves not only expand the boundaries of our business, but also lay a solid foundation for the continued evolution of our products and deeper industry integration."

BGM is accelerating its "multi-agent AI productivity platform" strategy, building a comprehensive matrix of capabilities that includes AI-powered marketing, AI workforce platforms, AI-driven industry applications, and AI infrastructure. With the addition of Xingdao Intelligent and YD Network, BGM will strengthen its position across hardware-software integration, industry expansion, and algorithmic innovation, enabling the Company to offer more efficient, intelligent, and scalable solutions to clients worldwide.

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SOURCE BGM Group Ltd

FAQ

What companies did BGM acquire and for how much?

BGM acquired Xingdao Intelligent and YD Network for a combined valuation of RMB800 million, paid through 37,123,142 newly issued Class A ordinary shares at $3.0 per share.

How will the BGM acquisitions affect existing shareholders?

The acquisitions will result in 15.6% dilution for existing shareholders, as the new shareholders from Xingdao Intelligent and YD Network will collectively hold this percentage of BGM's total outstanding share capital.

What are the main business areas of BGM's new acquisitions?

Xingdao Intelligent specializes in embodied service robots and AI-powered services, while YD Network focuses on intelligent stock trading through AI and quantitative algorithms.

When will BGM complete the acquisitions of Xingdao and YD Network?

The acquisitions are expected to close by the end of June 2025, subject to customary closing conditions.

What industries will BGM expand into with these acquisitions?

BGM will expand into restaurant services, retail, building management, healthcare, industrial inspections through Xingdao, and financial markets/trading through YD Network.