Enabling new business opportunities for CIC's expressway ITS market in the PRC
HONG KONG, May 18, 2011 /PRNewswire-Asia/ -- China ITS (Holdings) Co., Ltd. ("the Company", or "CIC", HKSE: 1900) announced that Beijing RHY Technology Development Co., Ltd. ("RHY Technology"), a wholly owned subsidiary of the Company, has acquired a total of 57% equity interest in Xinjiang Delida Information Technology Co., Ltd. ("Xinjiang Delida"), a company established in the PRC with limited liability, from Mr. Pan Jinghui and Mr. Guo Yonghu respectively, who are the existing shareholders of Xinjiang Delida and who are independent third parties of the Company (the "Acquisition"). Prior to the Acquisition, Mr. Pan Jinghui and Mr. Guo Yonghu held 91.6% and 8.4% equity interest in Xinjiang Delida respectively.
Total consideration for the Acquisition is approximately RMB2.69 million. The valuation was based upon the reference to the net asset value of Xinjiang Delida.
Synchronously with the Acquisition, Mr. Pan Jinghui has transferred 8% of his equity interest in Xinjiang Delida to Mr. Tang Yong, an independent third party in China. The Acquisition has now been completed. RHY Technology, Mr. Pan Jinghui and Mr. Tang Yong hold 57%, 35% and 8% of the equity interest in Xinjiang Delida respectively.
Xinjiang Delida is a transportation information technology company in Xinjiang, and offers logistics information solutions to the Xinjiang government. In 2009, Xinjiang Delida signed a 10-year Strategic and Cooperative Agreement with the Xinjiang Uygur Autonomous Regional Transportation Administrative Bureau for offering a public logistics information platform in the Xinjiang region. This public logistics information platform (www.xjjt56.com) was officially launched in July 2009, offering a wide range of information services, including source of goods, source of vehicle, warehousing, distribution hall, yellow page, logistics consulting, logistics encyclopedia, insurance service and customer service. In the coming 3 years, this public logistics information platform is expected to establish couple vertical channels, including Less than Truck Load ("LTL") express platform, LTL shipping system, GPS platform, SaaS software platform, payment & credit platform, and digital logistics park.
CIC's expressway intelligent transportation system ("ITS") business will be benefited through the Acquisition over the long term, enabling CIC to offer more comprehensive new products and explore more business opportunities and potentials within the expressway sector in the PRC.
As commented by Mr. Jiang Hailin, CEO and Chairman of CIC, "By acquiring a controlling stake in Xinjiang Delida, CIC will be able to provide more diversified products and services to the expressway market, and further differentiate ourselves from the competitors."
Mr. Lu Xilin, Vice President of the Company and President of Turnkey Solutions and VA Services in the expressway sector, believes that based on the public logistics information platform developed by Xinjiang Delida, CIC will be able to generate new revenue stream in the expressway sector gradually. CIC has established a stable and broad client base in the Xinjiang area. Through cross selling the new distribution center solutions to the existing installed client base, the Company can explore more business opportunities and potentials within the expressway sector. The application of logistics solutions in Xinjiang is not as widely adopted as in other provinces in the PRC. CIC can leverage its localized sales coverage and strong client's relationship to roll out the logistics solutions in the Xinjiang region. In light of the Xinjiang Government's development plan for the logistics industry, the coverage of logistics networks will be likely to expand.
About China ITS (Holdings) Co., Ltd.
China ITS (Holdings) Co., Ltd. ("CIC") is a leading transportation infrastructure technology solutions and services provider in China. CIC produces Turnkey, Specialized ITS Solutions and Value-added Services that address fundamental needs of safety, reliability, efficiency, pollution reduction and secure revenue collection in expressways, railways and urban traffic sectors.
According to industry consulting firm OC&C, CIC was ranked No.1 in market share by total contract value in the expressway, railway wired and wireless communications solutions of China's ITS market in 2009.
CIC enjoys a significant market share in selected ITS sub-segments. CIC has over 70% market share for communications and surveillance ITS solutions, over 10% market share for tolling in the expressway sector, and 70% and 60% market share for ITS solutions in the wired and wireless communications solutions of the railway sector, respectively.
About Xinjiang Delida Information Technology Co., Ltd
Xinjiang Delida is a Xinjiang Information Technology company, engaged in R&D of information technology, offering a wide range of information services, including Xinjiang public logistics information platform, and its 6 sub platforms and 2 sub projects:
1. Xinjiang LTL express platform
2. SaaS software platform
3. GPS platform
4. Customer service platform (Call centre service platform)
5. Payment, credit platform
6. Message platform
7. LTL shipping system project
8. Digital logistics park project
