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Now fireworks maker joins China's tech gold rush
[SHANGHAI] A Chinese fireworks maker is pushing into the Internet sector, an unlikely move that illustrates the country's hi-tech gold rush.
Panda Fireworks Group Co Ltd said on Friday it plans to diversify into investing in Internet and high-tech companies, as demand for fireworks has weakened after a government push to reduce noxious air pollution.
The announcement highlights the frenzy surrounding China's tech sector, where many firms boast eye-popping valuations and rapid growth. It is pulling in companies with little experience in the industry who want a piece of the wealth.
It comes after Premier Li Keqiang trumpeted this month policies to support innovation and drive entrepreneurialism in China.
Internet firms like Alibaba Group Holding Ltd, Tencent Holdings Ltd, Baidu Inc and JD.com Inc together represent roughly half a trillion dollars in market capitalisation, while privately-held smartphone maker Xiaomi Inc was in December valued at US$45 billion.
Relative to these, Panda Fireworks is small fry, with a market valuation of 6.09 billion yuan (S$1.35 billion).
The company said it would invest 50 million yuan to establish Panda Technology Investment Co Ltd, which will engage in equity investments in the high-tech industry and advisory and management services for the venture capital industry.