New economy bid for toll-road firm
Zhejiang Expressway is catching up with the technology fever, spending 18.5 million yuan (about HK$17.3 million) to buy a 30 per cent stake in a domestic computer company.
The H share has agreed to buy a 16.67 per cent stake in Joinhands Technology from Zhejiang Semiconductor Technology for 5.5 million yuan and to subscribe to an additional 20 per cent equity interest in Joinhands Technology's enlarged capital for 13 million yuan.
Zhejiang Expressway will hold 30 per cent equity interest in Joinhands when the deal is completed.
The H share's spokesman said Joinhands Technology would not give immediate and direct benefit to Zhejiang Expressway's toll road and fuel station operations.
'We invest in the company for the long-term . . . and the investment can serve as a kind of venture capital,' he said.
Zhejiang Expressway said the 18.5 million yuan investment in Joinhands amounted to less than 0.22 per cent of the H-share's consolidated net assets as of the end of last year.
Zhejiang Expressway said the risks involved were insignificant.
Morgan Stanley Dean Witter analyst You Jingfeng said the investment was neutral and insignificant.
He said the store value ticket system now used by Zhejiang Expressway sufficed to serve the toll operators and there was no need for the company to upgrade the technology beyond its present level.