JD Capital Cooperates with China Net Center in Entering Internet Cloud Ecosystem Market


Recently, China Net Center (300017) issued a three-year private placement plan, which stated that it would issue shares (43.95 yuan per share) to finance 3.6 billion yuan, so as to officially enter the oversea Content Distribution Network (CDN) market, conduct businesses in community cloud, cloud safety and other emerging sectors, and build an Internet cloud ecosystem. It is predicted that, when the plan is completed, the company will increase its revenue by 4,292 million yuan, with an annual profit growth of 820 million yuan. Up to June 16, the closing price of China Net Center has risen by 50.35%, compared with the private placement price. 

Emerging bellwether of the CDN industry

Established in 2000, China Net Center mainly deals in CDN. It was listed on the ChiNext in 2009. Benefiting from the explosive growth of Internet information, CDN in China has grown by more than 40% for ten consecutive years. China Net Center, by enhancing its competence continuously, succeeds in making its performance growth rate much higher than the industrial average and occupying over 50% of the market. It is now a leading enterprise in China’s CDN sector. 

In 2014, China Net Center gained a revenue of 1.91 billion yuan, with an annualized growth rate of 46.1% in recent five years. Its net margin reached 460 million yuan, annualized growth rate exceeding 70.9% during the same period. In the first quarter of 2015, China Net Center has maintained this momentum, the net margin increasing 79.22% on a year-on-year basis. 

Ambitious plan: overseas expansion plus comprehensive information service

While consolidating its domestic leading position, China Net Center is proactively developing the overseas market. As of now, it has turned over 134 million yuan overseas, accounting for 7.02% of the total revenue. Taking advantage of this private placement, the company will speed up overseas CDN business expansion and seize the strategic opportunity of “The Belt and Road Initiative” to become a leading CDN company in the world.

Meanwhile, based on the advantageous CDN businesses, it will devote to providing customers with all-around information services. The private placement in community cloud and cloud safety will enable the company to offer one-stop service of “trusteeship/calculation + acceleration + safety”, further enhancing its overall competitiveness and value as a bellwether company. 

JD Capital provides assistance

In this private placement, major stakeholders and the 245 management staff of China Net Center will subscribe for shares worth of no more than 650 million yuan, which fully demonstrates their confidence in the company’s future. JD Capital will subscribe for shares worth of 550 million yuan through JT Asset Management, its wholly-owned public fund, in an effort to help with the accelerated development of China Net Center. 

JD Capital has been laying emphasis on acquisition and reorganization in recent years. It helped the listed companies with almost 30 cases of acquisition and reorganization, and set up buyout funds with five of them.

In September 2014, JD Capital customized a whole set of developing strategies for its investee U-tour, covering home/broad and offline/online businesses. Later on, by acquiring overseas giants, becoming the controlling shareholder of domestic leading companies and taking shares of some online platforms to make such platforms accessible to listed companies, JD Capital helped U-tour increase its market value from 300 million yuan to about 10 billion yuan.

During the same period of last year, JD Capital helped its invested company China High-Speed Railway Technology Co., Ltd. (CHSR) to list on the A-share market by reshuffling. It was also with JD Capital’s assistance that CHSR completed a billion-level acquisition of Beijing Jiaoda Microunion Tech. Co., Ltd., thus increasing its market value by five times within nine months.

As the strategic partner of China Net Center, JD Capital will take full advantage of its industrial and capital resources to provide more value-added services while increasing investment.