TIDMDJI
RNS Number : 5316K
DJI Holdings PLC
22 September 2016
22 September 2016
DJI Holdings plc
PROPOSED RE-BRANDING AND STRATEGIC INVESTMENT
Repositioning of the Group, reflecting its strategy to become
one of the leading mobile technology providers in China
-- DJI Holdings proposes name change to BNN Technology plc
-- NewNet, which represents DJI's technology platform and
marketing resources in China, has agreed to acquire a 10% stake in
its joint venture partner Xinhuatong and transfers its lottery
assets into the Xinhuacai joint venture
-- Investment in Xinhuatong by NewNet offers DJI potential
involvement in both the sizeable and lucrative payment processing
industry in China, through its exclusive technology provider
relationship, and other high growth sectors it operates in
-- Rebrand and repositioning intended to reflect the Group's
Chinese identity and cultural heritage and the Group's evolution
into a technology provider in large high growth markets in China;
timed to take place ahead of secondary listing on Nasdaq
-- Nasdaq application to follow shortly after name change takes affect
-- Intention for company industry classification to be
re-classified with higher growth peer group on Nasdaq and AIM
DJI Holdings plc (AIM: DJI, "the Group", "DJI"), the Chinese
technology, content and services provider, is pleased to announce a
proposed rebranding and change of name to BNN Technology plc. The
Group will seek shareholder consent for the change at a general
meeting that will take place on 7 October 2016.
The proposed change in name reflects the broader changes this
year in the Group, which has seen DJI Holdings diversify its model
to become a dynamic technology platform provider that can
facilitate mobile payments, deliver mobile content and provide data
management to consumers throughout China, while preparing for a
dual-listing on Nasdaq.
In addition, NewNet is making a cash and asset investment to
acquire a 10% shareholding in its important trading partner
Xinhuatong, the exclusive provider of mobile payments, information
and other key services to the Xinhua News Mobile App owned by
China's national news agency. NewNet will transfer its lottery
assets into its Xinhuacai joint venture with Xinhuatong. DJI, as
the technology platform provider to NewNet, is expected to benefit
from enhanced revenues and profits as a result of NewNet's stronger
partnership with Xinhuatong.
Darren Mercer, Chief Executive of DJI Holdings, said:
"Now is the right time to begin building a new brand, with the
BNN Technology name, as we broaden from lottery specialist to
payment fulfilment, content-delivery, data management and
value-added services on mobile internet. We believe completing the
pivot to a technology company will add substantial shareholder
value as we enter high growth, multi-billion dollar markets in
China.
"We are also tremendously excited about the opportunity to
deepen our relationship with Xinhuatong through NewNet. NewNet's
investment further secures a long term partnership in which we are
one of the leading technology providers to the company, allowing us
to benefit from its strong commercial relationships in major
industries such as insurance and other key financial services
markets.
"Xinhuatong has the exclusive rights to provide payment
processing facilities within the Xinhua News Mobile App and is in
the process of applying for a national payment processing licence.
Upon a successful application, the benefits to our company will be
significant, not only in allowing us to participate in one of
China's largest industries, but also to substantially increase the
net margin across our platform. I am therefore increasingly excited
about both the future additional revenues and profits that our new
relationship with Xinhuatong through NewNet will bring to the
Group.
"The Board is hopeful that this repositioning of the Group will
help us attain a new industry classification on AIM and in due
course on NASDAQ which will reflect our future revenue streams and
better positions the Company in a sector with similar high growth
technology companies."
Mr Dong Jinhua, Founder and Chief Executive of Xinhuatong,
said:
"We are delighted to be strengthening and deepening our very
important relationship with NewNet, which has been very successful
to date. We look forward to extending our partnership with all
parties as we work together to capitalise on several exciting
opportunities in some of China's fastest growing industries,
supported by our plans to develop one of the country's largest data
platforms."
For further information, please contact:
DJI Holdings plc +44 (0) 1565 872990
Darren Mercer, Chief Executive
Officer
Scott Kennedy, Chief Financial
Officer
Stephen Benzikie, Communications
Brunswick (Public Relations) DJI@brunswickgroup.com
Brian Buckley / Diana Vaughton
Strand Hanson Limited (Nominated +44 (0) 20 7409
& Financial Adviser) 3494
Andrew Emmott / Ritchie Balmer
+44 (0) 20 7878
Mirabaud Securities LLP (Broker) 3362
Peter Krens
New Group Name and Rebranding
The Board believes that the proposed name change to BNN
Technology, and rebranding that will follow, reflects the Chinese
heritage and identity of the Group, as well as the completion of
its transformation from lottery specialist to broad-based
technology platform provider, with capabilities in mobile payment
facilitation, mobile content and data management. The name change
has been timed to take place ahead of the Group's secondary listing
on NASDAQ and it will promote a single identity to all of its
stakeholders in China, the US, the UK and beyond.
A circular has been posted today to Shareholders to convene a
general meeting to vote on and, if thought fit, approve the
resolution proposing the change of name. The circular will be made
available shortly on the Company's website and will provide the
necessary information to Shareholders on how they can vote. The
general meeting will take place at the offices of Eversheds LLP,
One Wood Street, London, EC2V 7WS on 7 October 2016 at 1 p.m.
As part of our re-branding, we are launching a new mission
statement which is below. We are also launching a new website which
is due to be launched by mid-November.
New Mission Statement:
"Our mission is to enrich the lives of Chinese consumers, by
utilising our technology to enable our partners to deliver first
class value added services, content and new and evolving
opportunities.
Alongside our partners we are committed to the betterment of
Chinese citizens by delivering practical services, information and
social participation programmes. We are at the centre of the
Chinese consumer's shift to a cashless society accelerated by
mobile adoption. At our core, we are a technology company that
processes high volumes of transactions and delivers content. We
have diversified our platform to process transactions and deliver
content for partners ranging from public utility providers to
banks, and online portals.
The Chinese consumer shift to 'life on mobile' is only just
beginning. We aspire to enrich the lives of Chinese citizens and
grow with China and our public and private sector partners by
enabling more rural and urban communities across the country to
access exclusive content and pay for more services online."
NewNet strategic investment in Xinhuatong and Repositioning
Beijing NewNet Science & Technology Development Co., Ltd
("NewNet") has agreed to acquire a 10% stake in Xinhuatong Network
Co., Ltd. ("Xinhuatong"). Xinhuatong is a software development
company and has the exclusive rights for payment processing and
other key services on the Xinhua News mobile app. Mr Dong Jinhua, a
director of the Company, is also founder and CEO of Xinhuatong. The
key elements of the investment comprise:
-- A RMB 20m cash payment by NewNet (approximately GBP 2.3 million)
-- The transfer of NewNet's lottery assets, including
technology, existing lottery JVs, lottery focused employees and
unique content, into Xinhuacai. Xinhuacai is a joint venture
between NewNet and Xinhuatong, in which NewNet has a 49% stake and
DJI provides technology to the joint venture
-- DJI will make available to NewNet, Xinhuacai and Xinhuatong
its robust and secure technology platform and its sports content
resources, including exclusive agreements with leading
international football clubs
By making this investment and transfer of assets, NewNet, as the
business partner and distributor of DJI in China, has significant
potential for enhancing long-term shareholder value at DJI:
-- Xinhuatong is in the process of applying for a national
payment processing licence. If successful this gives Xinhuatong,
and its partners, greater access to the rapidly growing mobile
payments market in China worth USD235bn([1]) in 2015, more than
double the previous year's figure and expected to see significant
growth over the coming years
-- With DJI providing the technology platform to Xinhuatong
through NewNet, it potentially gives the company a foothold in
another sizeable part of the Chinese payments value chain
-- If the licence application is successful, which would not be
likely until 2017, as the technology platform provider it will
increase DJI's share of wallet in a bigger and higher margin part
of the payments market. It is expected that it would also multiply
the commission received on any new future payment services
-- In addition, Xinhuatong has strong commercial relationships
in further consumer-facing service sectors attractive to DJI's
technology, not least the retail insurance industry
Furthermore, it is hoped that NewNet's transfer of assets into
Xinhuacai will enable the enlarged Xinhuacai to be better
positioned in the lottery market as it awaits new regulation and
seeks new opportunities. DJI, as the technology, sports content and
game content provider to both NewNet and Xinhuacai, should
therefore see greater long term prospects out of NewNet's
investment.
NASDAQ Update
Our intention was to complete the NASDAQ listing by the end of
this quarter, however due to the changes in the Groups business
model in 2016 we have delayed making the application until the
pivot to a technology company was complete.
Following a successful shareholder vote on the Group's proposed
change of name, DJI will begin its application for the secondary
listing on NASDAQ. Two successful submissions are required: one to
the NASDAQ exchange and a second, "F-1" application, to the US
Securities & Exchange Commission (SEC), with the latter being a
detailed prospectus. The Board have the intention to complete the
application as quickly as the process will allow, however we will
provide ongoing updates as we progress.
Importantly, and consistent with the Group's repositioning, we
will be seeking a new industry classification on AIM and in due
course NASDAQ, which will place us among a high growth peer group
of companies. Industry classifications are awarded according to a
company's predominant source of revenue. Going forward for the
Group, this will be the utilisation of its technology platform in
payments, providing mobile content and data services.
Board
In compliance with US best practice in corporate governance, it
is the Directors' intention to strengthen the Group's Board,
increasing its number of experienced and commercial non-executive
directors. Announcement on Board changes will be made in due
course.
Appointment of Brunswick
DJI Holdings is delighted to announce our new corporate
relations adviser Brunswick Group. Brunswick is a global firm with
23 offices worldwide and has extensive experience working in the
technology and financial services sector, with multi-national
clients in China, UK and the US.
Interim Results
DJI Holdings will announce its unaudited interim results for the
six months ended 30 June 2016 on 30 September 2016.
ENDS
[1] Source: Red Pulse 18(th) August 2016. Market size as at year
end 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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