Red chip Legend Holdings has invested US$4.5 million for a 30 per cent stake in mainland private software firm Kingsoft which plans to seek a listing.
It represents Legend's first foray into the software business and chairman Liu Chuanzhi said the company would invest further in that area by the end of the year.
He said the development of the software business would strengthen the company's market competitiveness and supplement its hardware operations.
'It will not only enhance the group's overall profitability, but also build up a new image of soft-and-hard integration.' The remaining 70 per cent is held by Kingsoft's management and original individual investors, including president Qiu Bojun, the programmer who invented the word-processing software WPS.
Kingsoft, established in 1978 and originally part of the Founder group, concentrates on three main types of software; office software, tool software and recreational and educational software.
Kingsoft's earnings record was not disclosed. Legend executive director Yang Yuanqing said its earnings had been rising with a net profit margin of 20 per cent.
