19 Jun 2017 07:00
19 June 2017
Signing of Zhejiang Xinhua to support Student Recruitment Platform
· Extension of Group's technology into new potential revenue generating areas
· Unique access to one of China's most valuable user groups with 35 million further education students
· B2C channel for the Group to sell its complete suite of products
BNN Technology (AIM:BNN), a London-listed Chinese technology, content and services company, confirms that it has successfully concluded negotiations and signed a three-year cooperation agreement with Zhejiang Xinhua to create a student services platform in China encompassing recruitment, financial services and funding for student innovation and enterprise.
Further to the announcement on 13 April 2017 detailing the Group's investment plans and related share placing, the Company is delighted to announce the first signed partnership to launch its products in Zhejiang province. The partnership with Zhejiang Xinhua will, upon full roll out, offer student recruitment services for both full-time and part-time jobs, access to crowdfunding, venture capital or angel funding for student innovation and business plans, microlending for purchases of mobile phones, laptops, tablets and other items relevant to students and a large platform for B2C sales for the Group's existing and future product ranges, such as mobile phone top ups, mobile data, petrol card top ups and other services.
Under the terms of the partnership, Zhejiang Xinhua, the provincial office of the Xinhua News Agency, will be responsible for organising media channel resources on which to launch the student platform, including the Xinhua News Agency mobile app and local government mobile app. It will coordinate relationships between universities and colleges, local government business management departments and other related parties, as well as leveraging its existing commercial relationships to support this initiative. The Group will provide all software, operating platform systems and hardware needed and will be responsible for its operation and maintenance, in return for a share of profits.
The platform will initially provide student recruitment services targeting a population of an estimated eight million graduates per year seeking full time jobs. Additionally, it will offer part time opportunities targeted at China's whole student population of 35 million. Revenues will be generated through fees charged to employers, sales of mobile phones and other devices (and related financing) and advertising. Discussions are ongoing with commercial partners who are able to supply mobile phones and other devices, as well as with banks to provide access to appropriate financing packages. These aspects of the platform are anticipated to be launched in October 2017 and revenue generating in the final quarter of the current financial year.
The partnership with Zhejiang Xinhua will enable the platform to access student data to verify qualifications and resumes for employers, as well as for validating employment opportunities presented to the students. BNN believes that such access is unique in China and that this represents a key competitive advantage in building a substantial presence in this market. Furthermore, BNN believes that the credibility offered by the relationship with Zhejiang Xinhua will lead to usage by organisations and students alike.
Initially the platform will focus on recruitment and payment services as described above. In due course, as announced previously, it is intended that the platform will feature a range of services to support innovation and enterprise. Working with financial institutions and local government departments to provide financial backing for business plans developed by Chinese college students, the Group hopes to identify new technologies and business processes that could potentially form the basis of exciting growth companies. Services planned include business plan advice and support, angel and crowd funding, specialist university expertise and advice, and online coaching from angels, professors and in-field experts.
The sizeable Chinese student market is regarded as a key target audience for many segments of online activity. Supported by the Chinese government's latest and 13th Five Year Plan, a key element of which is expanding higher education and prospects for graduates, this market is not at present dominated by any single commercial organisation. The Zhejiang contract therefore provides the opportunity for BNN and partners to enter this market, which will support and enhance existing products and sales platforms.
Rollout of the student services platform
Discussions are underway in a number of other provinces with regard to signing similar partnerships with Xinhua and the Company looks forward to being able to announce further updates in due course.
The initial elements of the student service platform are expected to be launched in October 2017, as outlined above, with the remainder of the Financial Services and Business Incubator elements (as set out in the announcement on 13 April 2017) launched by the end of Q1 2018. Accordingly, the Board expects these initiatives to contribute to Group revenues in the latter half of 2017 and beyond.
Darren Mercer, Chief Executive of BNN Technology, said:
"This important development will put us at the heart of one of China's most valuable user groups, namely its 35 million students. This partnership allows our platform to benefit from new potential revenue streams in the provision of recruitment services and higher margin B2C sales of our existing products to this user group. Furthermore, the student platform is expected to develop into a substantial database, which we believe will be attractive to a broad range of advertisers seeking to target this sector. We are delighted to be working with some of China's largest organisations across the whole spectrum of the platform and are excited about the opportunities this will create for the Group as we aim to take a substantial position in one of China's most important consumer markets."
For further information, please contact:
BNN Technology plc Darren Mercer, Chief Executive Scott Kennedy, Chief Financial Officer Stephen Benzikie, Communications
| +44 (0) 1565 872990 |
Strand Hanson Limited (Nominated & Financial Adviser) Andrew Emmott / Ritchie Balmer
| +44 (0) 20 7409 3494 |
Mirabaud Securities LLP (Broker) Peter Krens
| +44 (0) 20 3167 7221 |
About the Group
BNN Technology plc is a Chinese technology, content and services company that builds long-term partnerships to deliver China's citizens with value-added services, content, and evolving opportunities.
Listed on AIM since 2014, the Group principally engages in providing technology to partners to facilitate fulfilment of payments online and on mobile apps through partnerships or affiliate agreements with corporate and key government partners, and developing digital content, both online and mobile. Through NewNet and its partnership with Xinhuatong, the Group facilitates mobile payments, through its technology platform, on the Xinhua News mobile app in 12 provinces in China. The Chinese consumer shift to 'life on mobile' is only just beginning and BNN's platform technology enables urban and rural communities across China to access exclusive content and pay for more services online.
The Group employs nearly 300 professionals throughout China.