22 Aug 2016 07:00
22 August 2016
DJI Holdings plc
("DJI" or the "Company")
Trading update re Xinhuatong partnership
DJI Holdings plc (AIM: DJI, "the Group", "DJI"), a provider of technology for the promotion and transaction of online bookings, mobile payments and lottery sales in China, is pleased to provide a trading update regarding the partnership between Beijing NewNet Science & Technology Development Co., Ltd. ("NewNet") and Xinhuatong Network Co., Ltd (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. DJI is exclusively supplying the technology platform to the Xinhuatong partnership to facilitate the promotion of mobile payments and online bookings, including public utility bills, mobile phone top-ups and traffic fines.
The Xinhuatong partnership has now signed 10 provinces from the 12 provinces initially targeted, demonstrating further progress from the 7 provinces announced in April. The 10 provinces signed are the largest in terms of population and gross domestic product of the 12 provinces that are initially targeted. The partnership remains on track to sign the remaining 2 target provinces by the end of the year and expects the mobile app to be launched in all 10 signed provinces by the end of September 2016, significantly ahead of earlier expectations to launch in 9 provinces by the end of 2016. This development underpins the confidence of the DJI board in the Xinhuatong partnership making a substantial contribution to revenues in the fourth quarter of this calendar year.
The 10 signed provinces account for approximately 70% of nationwide utilities billings, including car fines and mobile top-ups, with billings in the 10 provinces totalling in excess of £400bn annually. In all 12 target provinces, the large sectors of gas, water and electricity payments still collect less than 15% of payments online.
In addition, the Xinhuatong venture has reached agreement with a number of new channel partners, all of whom are major Chinese organisations, to develop substantial new revenue streams based on DJI's robust and secure technology platform. These agreements are expected to launch in September 2016 and will begin to contribute to revenues shortly thereafter, as well as offering access to each of the partners' large and established user bases.
Amid rapid growth in China for mobile payments and services, DJI is identifying new sectors to address, utilising its robust technology platform and growing user base from which to build diverse and complementary revenue streams. The Directors believe that recent announcements by major Chinese corporations capitalising on this huge opportunity to offer a wide offering of mobile services, such as payments and money transfers to their large user bases, reinforces DJI's strategy to become a significant internet technology portal.
Commenting on these new developments, Darren Mercer, Chief Executive Officer of DJI Holdings plc, said:
"The Xinhuatong partnership is running ahead of schedule in the largest provinces targeted, while important channel partners are showing great interest in collaborating with our versatile technology platform and in developing content. DJI is excited to be part of China's well documented rapid growth in mobile services and the scale of the opportunity for the group to develop additional revenue streams remains very substantial. Today's update is the first of a number of announcements that the Board expects to make in the coming weeks and we look forward to updating the market again shortly."
ENDS
For further information, please contact:
DJI Holdings plc | +44 (0) 1565 872990 |
Darren Mercer, Group Chief Executive | |
IHA Consulting | +44 (0) 20 3393 1185 |
Stephen Benzikie | |
Strand Hanson Limited (Nominated & Financial Adviser) | +44 (0) 20 7409 3494
|
Andrew Emmott / Ritchie Balmer
Mirabaud Securities LLP (Broker to DJI) |
+44 (0) 20 7878 3362 |
Peter Krens |
Notes to editors
DJI's strategy is to use its secure, robust and versatile technology platform to capitalise on the migration online of China's consumer and public services sectors.
DJI is supplying the technology platform to the NewNet and Xinhuatong partnership to facilitate the promotion of mobile payments and online bookings through the Xinhua News Mobile App for public utility bills including electricity, gas, water, mobile phone top-ups and traffic fines in an initial 10 of 12 targeted provinces in China.
DJI also has a joint venture with the Heilongjiang Provincial Sports Bureau (HSB) to provide support services to all of HSB's commercial activities. These include football and winter sports in the province, notably China's largest ski resort, Yabuli.
The HSB joint venture contains, for the first time in a Chinese province, a Business-to-Business (B2B) online booking system for sports, based on DJI's technology. The JV agreed terms with three of China's largest online portals to sell and promote this B2B system from 1 November 2015.
DJI will continue to work with Chinese government agencies at national and provincial level, e-commerce channel partners and payment providers to develop opportunities to support a wide range of services and transactions online, including mobile and digital media.