CSI Secured Long-term Investment from Chen Yidan-led Dan Capital to Provide Global Service, Enhance New Technology Capabilities, and Accelerate Building of Cloud Service Ecology


Chinasoft International (CSI/the Company) (SEHK: 354), a Chinese large-scale comprehensive software and IT service company, announced that the Company would issue 180 million shares of convertible bonds in private placement to Dan Capital, with the conversion price of HKD5/share and a lock-up period of 3 years. This issuance of convertible bonds would raise a total of HKD900 million, to be used for the M&A and formation of the buyout fund and the upgrading of the JointForce platform.

Dan Capital, the investor of the Company’s convertible bonds, is a major investment fund initiated by and named after Mr. Chen Yidan, one of the five co-founders of Tencent, who is also a substantial shareholder of the fund. Mr. Chen Yidan is a main subscriber for this convertible bond issue. Based on the Company’s sustained track-record of excellent performance, stable management, and leading position and innovative technical capability in the industry, Dan Capital is optimistic about the prospect of the Company, and will commit to long-term investment in the Company. In the future, Dan Capital will utilize its rich resources and experience to help CSI actively seek development opportunities in strategic synergy, fully support the CSI’s strategic capital operation, and promote the Company’s healthy, sustainable development in the long run.

The issuance of this convertible bond and the attainment of Dan Capital’s strategic investment indicate CSI’s solid fundamentals and bright prospect, which are fully recognized by long-term, conservative institutional investors. The Company will capitalize on this funding to fully upgrade its development strategy, steadfastly advancing towards its goal of becoming a world-class IT service company.

Enhance new technology capabilities through M&A and strengthen the building of cloud service ecology

Since it was listed in 2003, CSI’s service revenue has increased 113-fold, making it the leading company in China’s IT service industry. The Company will utilize the proceeds from this financing to conduct extensive M&A to help further enhance the Company’s new technology capabilities, build cloud service ecology, and achieve strong support for business development by combining production and financing.

The Company’s M&A strategy will be implemented in parallel in both foreign countries and China. In foreign countries, the Company will focus on investing companies that can enhance the Company’s new technology capabilities. In emerging fields such as cloud computing, big data and artificial intelligence, the Company will connect advanced technical prowess of foreign countries with the broad market of China through M&A or by establishing joint-ventures, focusing on next generation IT service capability. In addition, the Company will open up more channels in overseas marketing to improve the Company’s delivery capability. In China, the Company will choose to invest in industrial cloud service companies relating to the Company’s industry chain with sound growth and development prospect in order to accelerate the building of cloud service ecology, further increase the Company’s earnings, and create more value for shareholders.

In the M&A of large-size foreign and domestic companies, the Company will set up industry M&A funds and establish investment platforms combining the government, industry capital, and social capital, proactively seize market opportunities in development through M&A, robustly conduct extensive expansion, so as to help the Company obtain new capabilities and achieve breakthrough in the size of globalized service.

Upgrade the JointForce platform to become an industry chain-wide IT service platform

This financing will accelerate the promotion of JointForce. In the future, JointForce will fully participate in the construction of New Smart Cities in regional cities. We will gradually build first-tier cities into port cities of JointForce, and second and third-tier cities into anchor cities of JointForce. JointForce will work with local governments to build cloud software parks, and operate the supplier ecology system in local cities with innovation and entrepreneurship at the center, so as to increase revenue and extend member.

Meanwhile, this financing will allow JointForce to build on IT crowdsourcing to continuously expand service types, develop value-added functions, and improve profitability. Accordingly, the Company will develop online advertising, digital marketing, third-party insurance, and other services. In addition, the Company will proactively explore premium projects on JointForce to activate its functions in venture capital investment, building JointForce into the most powerful industry chain-wide IT service platform with the highest customer adherence.

This financing fully upgrades the Company’s development strategy. In the future, the Company is expected to enter into a stage of accelerated development. With the advancement of M&A transactions, the Company will achieve new breakthroughs in capabilities and size as well as in profitability, while the promotion and upgrade of JointForce will significantly optimize the Company’s current business model and increase the Company’s value. We believe that this financing will fuel the take-off of the Company in business and capital market, propelling the advancement of Company on its way to become a world-class IT company with substantial comprehensive strength and outstanding innovation capability.

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