KuangChi Connection Technology, a subsidiary of Kuang-Chi Group, has officially become one of the strategic investors of China United Network Communications Limited ("Unicom A Share Company") under its mixed ownership reform plan. The announcement was made by China United Network on August 20th, 2017.
According to the announcement, the total investment from Kuang-Chi Connection Technology amounts to 4 Billion Yuan, representing 1.88% of the enlarged share capital issued for China United Network. Other strategic investors include Tencent, Baidu, Alibaba.
KuangChi Science Limited (00439.HK), the Hong Kong-listed arm of Kuang-Chi Group, released a voluntary announcement on August 21st. According to this announcement, Kuang-Chi Group will thoroughly and strategically cooperate with China United Network in the areas such as cloud computation, Big Data, Internet of Things, Artificial Intelligence, home internet, digital content, retail system and payment finance.
Analysts have said the need to develop more innovative business programs is the reason that China United Network has introduced vertical companies into investment. As a leading vertical company in the industry, Kuang-Chi Group shares the same vision with China United Network. Kuang-Chi has been innovative in the previously stated areas and includes the technology of gesture control, emotion analytics, video intelligence, biometric authentication, photonic authentication and more.
The investment is expected to integrate resources and advantages, to achieve mutual benefits so as to promote the overall development of key businesses and industry chains. In order to make the best of the reform, both sides need to coordinate on their business models to reach a higher level of synergy, an analyst added.
China United Network is the second-largest telecommunications carrier in China. The company said in its announcement that it would raise no more than 61.725 billion Yuan with 35.19% of shares from major investors. It plans to use the fund for upgrading 4G capabilities, technology validation and enablement of 5G network related technologies, the launch of trial programs in relation to 5G network and the development of innovative business programs.