Tencent buys 20pc stakein Caixin
Tencent, the mainland's biggest internet company, will buy one fifth of Caixin Media, set up less than three years ago by prominent business journalist Hu Shuli.
Caixin said it welcomed Tencent as one of its new shareholders after an issue of new shares, adding that Hangzhou-based publisher Zhejiang Daily Media's 40 per cent stake in the group remained unchanged.
Mainland media said Tencent would pay 56.48 million yuan (HK$69.4 million) for the 19.77 per cent stake in Caixin, but Tencent in Hong Kong declined to comment on the size of the stake or the price.
Caixin Media was set up in December 2009 by Hu after she left Caijing Magazine, which she co-founded in 1998. Caixin has a website and video platforms and three periodicals.
'Caixin is one of the first of the mainland's traditional media arms to expand into the internet,' said Qiao Mu, director of the International Communication Research Centre at Beijing Foreign Studies University.
'Caixin has a reputation for quality stories and scoops, but its website is not as influential as news portals like Sina and Sohu,' Qiao said.
Based on its popular instant messaging service QQ, Tencent has the largest internet user group in the country. Active user accounts of QQ stood at 752 million as of March 31, according to data from Tencent, which is based in Shenzhen and listed in Hong Kong.
Qiao said the investment would help Tencent improve its image by carrying Caixin's high-quality investigative stories.
'It's an internet giant but it's often seen as only focusing on online games and group chatting,' he said.
Hong Bo, a Beijing-based IT commentator, said: 'Obviously any media group will benefit from teaming up with Tencent, the largest internet company in the country. And Tencent can attract more high-end users as a result of this.'
Zhejiang Daily Media paid 40 million yuan for its stake back in 2009. Zhejiang, which is listed in Shanghai, put 19.77 per cent of Caixin Media up for sale on its Zhejiang Asset and Equity Exchange last September.
The buyer was required to pay about 56.48 million yuan for the stake and lend 100 million yuan to Caixin Media. Details of the share offering were not released, although Wong Ching, a mainland property tycoon who has lent money to Asia Television, reportedly showed an interest.
'Zhejiang Daily Media didn't end up selling its stake, perhaps because it couldn't get its target price,' Hong said. 'It's also possible that it simply changed its mind. It has big ambitions in the new media landscape.'
Caixin Media is effectively controlled by three Tianjin-based companies that between them hold 59 per cent of the group.