Telecom service provider Dr. Peng (SH:600804) planned to fully acquire Yihexun Technology, a wireless network company, with 14 million yuan ($2.29 million) in a bid to accelerate the development of its mobile Internet business (report in Chinese).
Dr. Peng concluded the acquisition at a high premium rate, because the registered capital of Yihexun is only 3.55 million yuan. It is the innovative business model and impressive team of Yihexun that attracted Dr. Peng, citing Ren Chunxiao, board secretary of the listed company.
According to Dr. Peng, the innovation of Yihexun is based on its wireless sensor network, which can position the mobile phones via Wi-Fi electromagnetic wave, like the case with base stations and mobile phones. By analyzing the commonly visited venues of customers, merchants can get a deeper understanding of the preferences of them so as to compile more accurate marketing strategies, introduced Wu Shaoyan, vice president of the company.
Yihexun has signed strategic cooperation agreements with several chain stores including, Yintai, Easyhome, and YY Sport. Wireless network developed by the company have been installed in nearly 50 Yintai stores around the country to prepare for testing.
Another driving force for Dr. Peng to acquire Yihexun is that the core team of Yihexun has over 18 years of experiences in Internet technology development, marketing, and network operation.
Cooperation with retailers is one of the steps for Dr. Peng to explore free Wi-Fi industry. The company previously announced an investment of 2 billion yuan to construct millions of Wi-Fi access points in major cities by the end of 2014.