SHANGHAI/BEIJING (Reuters) - 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 (NYSE:BABA) Group Holding Ltd, Tencent Holdings Ltd, Baidu Inc (NASDAQ:BIDU) and JD.com Inc together represent roughly half a trillion dollars in market capitalisation, while privately-held smartphone maker Xiaomi Incwas in December valued at $45 billion (30.25 billion pounds).
Relative to these, Panda Fireworks is small fry, with a market valuation of 6.09 billion yuan ($979.97 million).
The company said it would invest 50 million yuan (5.41 million pounds) 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.