Alibaba, China Mobile weigh $443m joint investment in US-blacklisted Dahua

Photographer: Qilai Shen/Bloomberg

Alibaba Group Holding and China Mobile Communications Group Co are considering investing 3 billion yuan ($443 million) in Zhejiang Dahua Technology Co Ltd, three people with knowledge of the matter said.

Dahua, China’s second-largest surveillance equipment maker, is among Chinese tech firms that Washington last year placed on a blacklist of companies it said helped Beijing monitor and detain Uighurs and other Muslim minorities. Those blacklisted cannot buy US technology without US government approval.

E-commerce leader Alibaba and top telecommunications group China Mobile plan to jointly invest in Shenzhen-listed Dahua, which has a market capitalisation of $10.3 billion, via a private share placement in coming weeks, the people said.

China Mobile is also negotiating a three-year business agreement with Dahua worth 40 billion yuan, said two of the people, who declined to be identified as the plans are private.

The agreement would give China Mobile use of Dahua’s big data and cloud computing services, video surveillance equipment, and Internet of Things (IoT) technology, they said.

The business agreement and investment plan are reported here for the first time. Neither China Mobile nor Alibaba responded to requests for comment. Dahua said it did not have any information on the matter.

Smart city demand

The deals would come as the government builds over 500 smart cities featuring the world’s most sophisticated surveillance technology networks, with millions of cameras in public places and increased use of techniques such as facial recognition to manage issues as varied as traffic and public health.

The initiative could be a boon for Hangzhou-based Dahua and rival Hangzhou Hikvision Digital Technology Co Ltd, with products such as video surveillance, access control, and remote image monitoring systems.

China’s smart city market is likely to be worth 25 trillion yuan by 2022 from 7.9 trillion yuan in 2018, showed July data from researcher Qianzhan. The COVID-19 pandemic has added to prospects with demand surging globally for thermal cameras.

Amazon.com Inc bought 1,500 cameras from Dahua, which is present in over 50 countries, in a near $10 million deal to take workers’ temperatures, Reuters reported in April.

Dahua chairman Fu Liquan is the surveillance firm’s single largest shareholder with a 34% stake, with minority shareholders including state-owned Central Huijin Asset Management, showed the company’s 2020 first-half earnings report.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.