Xinhuanet Co., Ltd. debuts on Shanghai bourse on Friday with its shares surging to a trade suspension immediately after opening. (Xinhuanet)
BEIJING, Oct. 28 (Xinhua) -- Xinhuanet Co. Ltd. debuted on the Shanghai Stock Exchange on Friday with its shares surging immediately after opening.
Xinhuanet.com, the website of China's official news wire Xinhua News Agency, rose 43.99 percent to 39.87 yuan (5.88 U.S. dollars) per share, as the daily 10 percent limit on share price movement does not apply on the debut listing day.
A total of 51.9 million shares of the company became available on the market after the IPO, accounting for a quarter of its total capitalization.
Xinhua News Agency holds more than 80 percent of the shares.
According to the company's prospectus, it plans to use the funds raised to expand its business in multi-media services, cloud platform, mobile Internet services, e-government big data analytic system and online education.
"The entry into the A-share market is significant and will create fresh opportunities for the company," Xinhuanet chairman and president Tian Shubin said at a ceremony in Shanghai.
He said Xinhuanet will continue to integrate technology, capital and talent into its media business in the future to speed up the drive toward a world-class Internet culture company.
"By going public, the company will be able to improve its infrastructure and R&D capability," said Zhao Peilin with the China International Capital Corp., sponsor of the IPO, adding that investment in online education will bring considerable returns to the company.
The company got the green light for the IPO a month ago after years of waiting.
It initially applied for an IPO in early 2013, but the procedure was suspended as the China Securities Regulatory Commission halted approval of new stock listings. Another application was submitted in mid-2014 after the approval process resumed.
Xinhuanet is the second state media organization to go public. People.cn, the website of the People's Daily, was listed in early 2012.
Xinhuanet.com was established 20 years ago to provide around-the-clock news in various languages to the domestic and foreign audience.
The website's IPO is the latest move to transform the state-run news agency, as the Internet and technology have reshaped the media sector.
The news agency, which will celebrate its 85th anniversary next month, is exploring multi-media services and marketizing some of its subsidiaries to improve the competitiveness and reinforce the market influence.
Xinhuanet has started to use drones to cover breaking news and experiment with robot writers, as well as strengthen cooperation with high-tech firms in other sectors, such as using big data to redefine medical treatment.
Thanks to the efforts, Xinhuanet witnessed rising net profits in the past three years, from 167 million yuan in 2013 to 261 million yuan last year. In the first half of 2016, net profits stood at 102 million yuan.
Alexa Internet, a California-based Internet information provider, ranked the news website at 86th globally in terms of traffic data as of Oct. 26.
Xinhuanet's stellar performance was also attributable to China's robust media sector, which features strong consumption and new technologies.
The sector's market size increased 12.3 percent year on year to 1.28 trillion yuan last year, outperforming the country's GDP growth, data from consulting firm CIConsulting showed.
Analysts expect the sector, along with the broader cultural industry, to gather steam in the next few years helped by continued policy support. The government plans to develop the cultural industry into a pillar sector for the economy by 2020.
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China's Xinhuanet gets approval for going public in Shanghai
BEIJING, Sept. 24 (Xinhua) -- Xinhuanet.com, the website of China's official news wire Xinhua News Agency, has got the green light for an IPO on the Shanghai bourse. Full story
