The Avanti Group Comments on Xinhuanet IPO.


Posted July 3, 2014 by rlewis1968

The Avanti Group comments on Xinhuanet Co, Itself a unit of China’s official Xinhua News Agency as they plan to use the proceeds raised from its Shanghai IPO to expand in cloud computing and the mobile Internet offerings.

 
The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to Xinhuanet Co, set to offer some 51.9 million shares which represent 25% of the company’s shares outstanding, according to a filling from the Beijing-based company on the China Securities Regulatory Commission. Proceeds from Xinhuanet’s planned sale, which was revealed back in January of 2013, are going to be used in the funding of five projects with a total investment value of 1.5 billion Yuan, according to the company’s prospectus.

Xinhuanet’s IPO comes at a time that sees Chinese state-run media companies selling shares in efforts to reduce the government’s financial burden while also allowing investing in expansion to help meet rising demand for news services on mobile internet devices including smart phones and tablets. Prior examples include the 2012 IPO of People.cn Co, the Communist Party administered People’s Daily newspaper’s online arm, which generated capital inflow of 1.4 billion Yuan, $226 million.

“The early days of apprehension regarding the buying of Chinese state run or administrated companies are long past with most investors now looking at what is really important, the bottom line. Xinhuanet has seemingly laid out a very coherent plan for growth by expanding into new territories and this is very pleasing from an investment standpoint,” said Martin Blanke Equity Research Specialist at The Avanti Group.

The largest of the proposed projects that Xinhuanet plans to fund from its IPO, will cost around 644.7 million Yuan and establish a cloud platform for multimedia applications and services, with the second-largest costing 531.6 million Yuan to be spent on developing a system for mobile Internet integration. Additional planned projects will cover a data analysis system, media technology research as well as a development center for online education programs.

“The opportunity presented by Xinhuanet is quite a good one with clear room for growth and detailed plans to achieve this, something that is often quite lacking in much larger Western IPOs, often with what should be predictable results. This situation helps to make Xinhuanet’s offering well suited as a first Chinese based holding for any investor, as well as a good addition to an established portfolio,” concluded Martin Blanke Equity Research Specialist at The Avanti Group.

The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.
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Issued By The Avanti Group
Country Japan
Categories Business
Last Updated July 3, 2014