Chinese video service provider Baofeng to compete with Xiaomi on smart TVs
Baofeng, a Chinese online video service provider that has pinpointed virtual reality as one of its future business interests, announced this week that it will develop a smart TV brand in a joint venture with other domestic companies.
Partners include Chinese animation company Alpha Animation and Culture, consumer electronics manufacturer 3Nod, and Ririshun, a logistics subsidiary of Hong Kong-listed Haier Electronics.
Baofeng CEO Feng Xin told reporters at a press event on Monday that the company will “100 per cent” launch a TV this year, adding that much can still be done to improve the internet TV products currently on the market.
The newly established venture also acquired Haier’s smart TV affiliate Tongshuai Chuangzhijia. Baofeng holds a 50 per cent stake, while Ririshun and Alpha Animation will own 21 per cent and 10 per cent, respectively. The remainder belongs to the company’s management team.
Baofeng has over 50 million daily active users. Moreover, Alpha Animation’s content and 3Nod’s video technology expertise will give Baofeng TV a competitive edge, Feng said.
Ririshun will play a supporting role in the joint venture by providing supply chain management, logistics and sales channels.
Baofeng's competitor LeTV and Chinese electronics giant Xiaomi, dubbed "China's Apple", already have smart TVs on the market.
Baofeng began trading on the Shanghai-Shenzhen CSI300 index on March 24 of this year. After initially listing at 7.14 yuan (US$1.15) a share, its stock price jumped over 4,000 per cent within two months to hover around 300 yuan.
The company suspended trading on June 11 “to avoid abnormal stock price volatility”, according to a statement it released last month.
Its strong performance may have prompted other overseas-listed Chinese tech companies to consider relisting in China. Over 20 Chinese companies in this sector have received proposals to go private this year.
Many more have recently halted trading on China’s stock markets following failed government efforts to stem a shocking market rout, which has seen the nation's two key indexes in Shanghai and Shenzhen slide 30 per cent in three weeks.
Over 1,200 companies, or 40 per cent of all listings, have now suspended trading.
Beijing has taken an interventionist approach that is apparently at odds with its messages of greater market liberalisation, but even these newly rolled out measures have had limited impact.
After cutting interest rates, China is now allowing insurance companies to invest more assets in stocks. It has also frozen scores of IPOs in a bid to shut down excess liquidity in the market.
At the same time, China’s central bank has pledged unlimited liquidity support to China Securities Finance Corp, the government-backed margin finance agency. Margin trades were cited as one of the reasons for the market collapse last week.