DJI Holdings Plc, a provider of technology for lottery sales in China, says it has a deal to supply a “game technology platform” and “facilitate mobile payments” via China’s Xinhua News mobile application.
The mobile payments function will cover public utility bills including electricity, gas and water, as well as top-up payments for mobile phones and for settlement of traffic fines. It will be available initially in seven of 12 targeted provinces in mainland China, DJI Holdings said in a filing on Thursday to the London Stock Exchange.
The document said that in 2014, around 90 percent of the approximately RMB4.3 trillion (US$663 billion) spent that year in mainland China on electricity, water, gas, waste disposal, toll fees and broadband payments were paid by consumers using offline methods via retail outlets, self service kiosks and stored value cards.
DJI Holdings described the deal enabling it to work with the Xinhua News mobile app as “transformational” for the company.
“The directors of DJI believe that this agreement represents a significant opportunity for the group’s game and technology platform to be a central part of one of the leading mobile apps in China,” said the filing.
It added: “The scale of the Chinese payments market not yet online has the potential both to accelerate earnings growth substantially and to significantly enhance the group’s presence in new industry sectors across China.”
DJI Holdings said the deal would be via investment and cooperation with an entity called Beijing NewNet Science and Technology Development Co Ltd, which, it added, had secured a partnership with Xinhuatong Network Co Ltd and branch offices of Xinhua, an official news agency in China.
DJI Holding’s investment in the new venture would be funded by the proceeds of a placing of new ordinary shares in the company to raise approximately GBP10.5 million (US$15.1 million) – before expenses – through Mirabaud Securities LLP, at a price of GBP0.60 per share.
The document stated that Xinhua launched its mobile news app in June 2015 and was reported to have registered 120 million users by February this year.
“It is expected that the recent average growth of 10 million users per month will continue into the foreseeable future as the app develops additional functionality and the partners believe that the app will reach 300 million registered users during 2017,” said DJI Holdings.
To date, seven mainland Chinese provinces, with a combined utility bill spend of more than RMB1 trillion in 2014, have agreed to launch the mobile payment facility through the Xinhua News App and a further five are targeted for launch in the coming months, said DJI Holdings.
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