Chinese state-owned news site operator Xinhuanet Co (603888.SH) recently announced that it has signed an agreement to set up a new technology company called "Xinhua Smart Cloud Technology" with several subsidiary companies of parent firm Xinhua News Agency, Ali Venture Capital, and Hangzhou-based Shuwenyun Investment Partnership.
Xinhuanet said that the company, called Xinhua Zhiyun Technology, will develop specialized technologies for storage, production, distribution, and computing, and will create mobile, social, and smart technology platforms. The company will be set up with RMB 490 mln in registered capital. This will support Xinhua's media integration, transformation, and upgrade goals, increase innovation, and support business development.
The companies that will establish the technology company with Xinhuanet include Xinhua News Agency's new media subsidiaries Xinhua New Media Culture Communication and China Economic Information Service. Ali Venture Capital is the venture capital arm of Chinese e-commerce conglomerate Alibaba Group (NYSE: BABA), and Shuwenyun Investment Partnership is an investment firm in which Ali Venture Capital is a limited partner.
The new company's ultimate controlling shareholder will be Xinhua News Agency, with a 51% stake. Xinhuanet will contribute RMB 200 mln for a 40.8% stake, and Xinhua New Media Culture Communication and China Economic Information Service will also control a total 10.2% stake.
The two Alibaba-related companies will control a 49% stake in the venture. Ali Venture Capital will invest RMB 340 mln for a 34% stake and Shuwenyun will spend RMB 150 mln to take a 15% stake. Shuwenyun is still in the preliminary stages of organization and registration formalities with the State Administration for Industry and Commerce (SAIC) are expected to be finalized by the end of April.
Xinhua Zhiyun Technology - Shareholder Breakdown
|Ali Venture Capital||34.00%|
|Shuwenyun Investment Partnership||15.00%|
|New Media Culture||6.12%|
|China Economic Information Service||4.08%|