China Metal Uni­com, man­u­fac­tur­erBaidu form buys al­liance ma­jor­ity on mo­bilestake in­Hol­ly­wood­in­ter­net amid SOE film re­forms com­pany

China Daily (USA) - - BUSINESS - By By BLOOMBERGLI XI­ANG lix­i­ang@chi­nadaily.com.cn

China United Net­work Com­mu­ni­ca­tions,A Chi­nese metal the man­u­fac­tur­ergov­ern­ment-owned has an­nounced par­ent theof the ac­qui­si­tion coun­try’s of a se­cond-largest­ma­jor­ity stake wire­lessin a Hol­ly­wood car­rier, film and pro­duc­tionBaidu Inc agreed com­pany, to the part­ner­lat­est moveon mo­bileof Chi­nese in­ter­net, in­dus­trial ar­ti­fi­cial firms in­tel­li­gence­seek­ing to di­ver­sityand other from ar­eas loss­mak­ing amid plans busi­ness­es­for amid own­er­ship the eco­nomic re­form slow­down.of State-owned en­ter­prises.Xinke New Ma­te­ri­als Co Ltd, Thea cop­per com­pa­nies pro­ces­sor will basedalso co­op­er­atein An­hui province,on big data­said it and will ba­sic ac­quire telecom­mu­ni­ca­tion80 per­cent of stake in ser­vices, Mid­night the In­vest­ments­par­ent of China LP, Uni­comthe owner Hon­gof Hol­ly­woodKong Ltd said pro­duc­tion on Wed­nes­daystu­dio Volt­agein a state­ment. Pic­tures for Baidu 2.39 will bil­lion help yua­nadd ($350 mil­lion), ac­cord­ing to dig­i­tal ad­ver­tis­ing and tools its fil­ing to the Shanghai like fa­cial recog­ni­tion at the Stock Ex­change pub­lished on mo­bile car­rier’s more than Sun­day. 300,000 stores, the search

The US film­maker pro­duced en­gine gi­ant said in a sep­a­rate movies in­clud­ing the state­ment. award-win­ning The an­nounce­men­twhere in­dus­trial comes com­pa­nies are step­ping up ef­forts about a month af­ter the to di­ver­sity their busi­ness Na­tional Devel­op­ment and from loss-mak­ing sec­tors Re­form Com­mis­sion se­lected through in­vest­ment in more China United Net­work, along promis­ing busi­ness such as with five other State-owned the en­ter­tain­ment in­dus­try. en­ter­prises, for a pi­lot pro­gram

“There is cer­tainly a trend in mixed-own­er­ship here as com­pa­nies in loss­mak­ing re­form with in­dus­tri­es­the aim are of look­ing re­vi­tal­iz­ing for them. op­por­tu­ni­tiesThe col­lab­o­ra­tionin sec­tors rais­eswith the high prospect­growth of po­ten­tial. China United En­ter­tain­ment Net­workis fur­therone of them,” en­gag­ing­said Xiao Han,with Baidua part­neron re­form,at Chi­nese though en­ter­tain­ment any move re­search­will need com­pany gov­ern­men­tEn­tap­proval,Group Inc. said Steven Liu, an an­a­lyst Xinke at said Chi­nain its Se­cu­ri­ties­fil­ing that In­ter­na­tional.the deal, which will be a cash trans­ac­tion,“The com­pa­nieswill help boost­may its be tak­ing prof­itabil­ity ini­tia­tive­and strength­ento ex­plore ide­a­sits po­si­tion aroundin the mixed-own­er­ship­do­mes­tic and in­ter­na­tion­al­re­form, as film the busi­ness. gov­ern­ment has pro­vided no de­tailedThe com­pany guid­ance re­porte­don how a it should­loss of 79.8 progress,”mil­lion yuan said in Liu.the “In third other quar­ter words, while China the Unit­edUS firm Mid­night In­vest­ments Net­work is of­fer­ing the re­ported to­tal net profit of gov­ern­ment some in­spi­ra­tion $118 mil­lion in the first half of on how the re­form could this year. take shape.” An anony­mous banker who The mixed-own­er­ship ad­vised Xinke on the deal was re­form aims to boost ef­fi­ciency quoted by the Fi­nan­cialTimes of State-owned en­ter­prises as say­ing that the com­pany and could take place was “aim­ing at strate­gic trans­for­ma­tion in dif­fer­ent through ways, the in­cludin­gac­qui­si­tion”. sale of a mi­nor­ity stake to a pri­vate Xinke com­pany.al­ready en­tered Tech­nol­o­gythe Chi­nese com­pa­nies en­ter­tain­mentsuch as Baidu,busi­ness Alibababy pur­chas­ingGroup Hold­ing do­mes­tic Ltd TV and pro­duc­tionTen­cent Hold­ings­firm Kingswood Ltd could Cul­turebe “prob­a­ble”for 1.2 bil­lion choices yuan as in a 2014. strate­gic in­vestor in China Some Uni­com, in­dus­try Elaine an­a­lysts Lai, fearan an­a­lyst­that the at deal Jef­feriesby Xinke Hong could Kong Ltd, face said reg­u­la­to­ry­last month. hur­dles Rep­re­sen­ta­tivesas the Chi­nese se­cu­ri­tiesat both reg­u­la­torChina Uni­comhas and tight­ened Baidu su­per­vi­sion­de­clined to of com­mentlisted com­pa­nies on whether ac­quir­ing Baidu as­setswill be in a in­dus­tries­part­ner in mixed-own­er­ship­not re­lated to their core ac­tiv­i­ties. re­form. But Xiao from En­tGroup China Uni­com shares rose Inc said that the reg­u­la­tor’s 0.6 per­cent as of 9:39 am in in­ten­tion is to curb il­le­gal Hong Kong trad­ing on Thurs­day. oper­a­tion and spec­u­la­tion in Baidu’s US de­posi­tary theM&Amar­ket, which is not re­ceipts dropped 2.7 per­cent the case for Xinke as Volt­age as of the close in New York on Pic­tures is a good qual­ity as­set Wed­nes­day, com­pared with that would help boost the a 0.7 per­cent de­cline in the com­pany’s prof­itabil­ity and S&P 500 In­dex. mar­ket value.

China United Net­work is of­fer­ing the gov­ern­ment some in­spi­ra­tion on how the re­form could take shape.”

Steven Liu, an­a­lysts

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