Caixin
Sep 23, 2016 07:58 PM
BUSINESS & TECH

Xinhuanet.com Gets Green Light for IPO

(Beijing) — Chinese securities regulators have approved a request by Xinhuanet.com, the website of China's official news agency, for an initial public offering on the Shanghai stock exchange, the China Securities Regulatory Commission said late Friday.

Xinhuanet.com had said in June it planned to issue 51.9 million shares in an offering worth about 1.49 billion yuan ($223 million). Xinhau has been waiting in line for China's IPO approval since 2013.

Funds raised from the IPO will be invested in building cloud platform, mobile internet development, online education and other media and data projects, according to the IPO prospectus of Xinhuanet.com.

Established in 2000, Xinhuanet.com is 88 percent controlled by Xinhua News Agency and its affiliated companies. After the public offering, Xinhua News Agency’s shareholding will be diluted to 63.8 percent. Other existing shareholders of Xinhuanet.com include China Unicom, China Telecom and Nanfang Media Group.

According to the prospectus, Xinhuanet.com reported 630 million yuan in 2014 revenue and 188 million yuan net profit. Fifty-five percent of the company’s total revenue came from online advertising. In 2014, Xinhuanet.com received tax deductions and government subsidies equivalent to 31 percent of its net profit.

Xinhuanet.com first submitted its IPO application in 2013, shortly after another state-backed media People’s Daily Online, the website of the party’s mouthpiece, went public in 2012. But the application was suspended as the regulator stopped new IPO approval amid stock market turmoil. In 2014 and 2015, Xinhuanet.com again submitted its application.

Contact reporter Han Wei (weihan@caixin.com); editor Ken Howe (kennethhowe@caixin.com)

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