China’s Suning, Hony Capital to invest $420 mln in PPTV

October 29, 2013 Leave a comment

China’s Suning, Hony Capital to invest $420 mln in PPTV

5:59am EDT

* Suning stake will be 44 percent of PPTV

* Deal values PPTV at $568 million

* Suning calls deal “strategic investment”

* Suning shares up 58 pct year-to-date

By Paul Carsten and Donny Kwok

BEIJING/HONG KONG, Oct 28 (Reuters) – China’s Suning Commerce Group and Hony Capital, an affiliate of Lenovo Group, will invest $420 million in PPTV, a Chinese online TV services provider, Suning said in a statement on Monday. Suning will invest $250 million to buy a 44 percent stake in PPTV and become its largest shareholder. It is believed Hony Capital will make up the remaining $170 million although the statement did not specify that. The deal values PPTV at $568 million.Trading in Suning shares was suspended on Monday and will resume on Tuesday.

“It is a key step for Suning to become a fully Internetised company and is an important step in speeding up its transformation process,” Suning Vice Chairman Sun Wei-min said via microblog service Weibo.

Suning, which competes with GOME Electrical Appliances Holdings Ltd backed by U.S. asset manager Bain Capital, has been forced to rethink its business model and expand into areas such as Internet services and e-commerce to chase a growing number of Internet shoppers.

PPTV is the largest online TV service in China with more than 340 million users and offers sports, entertainment, news and other video content, according to its website ().

Online TV is gearing up to be hotly contested as Chinese Internet firms like Alibaba Group Holdings, Baidu Inc and Xiaomi Tech have all recently expanded into the business, vying with more experienced companies like Sohu Inc and Youku Tudou Inc.

Hony Capital is sponsored by Legend Holdings, the parent of the Hong Kong-listed Lenovo Group, the world’s number one PC manufacturer.

According to Standard & Poor’s Capital IQ database, Hony Capital has invested in media and online TV businesses including TV advertising production firm Beijing Galloping Horse Film & TV Production Co Ltd, media company Happigo Home Shopping Co Ltd, and iQIYI.com Inc, an online television and movie portal operator in China of which Baidu owns a controlling share.

With the traditional PC sector on the decline, Lenovo has accelerated its foray into mobile devices, rapidly rising to become the No.2 smartphone vendor in China, the world’s largest smartphone market.

Shares of Suning have soared nearly 58 percent so far this year, outpacing a 6 percent drop in China’s CSI300 Index .

Filed under TMT Trends

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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