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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.

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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.

REUTERS

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