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SOHU Enters China's Online Securities Trading Industry With Joint Venture
BEIJING, CHINA, April 17, 2002 - SOHU.COM (Nasdaq: SOHU),
China's leading online media, communications and commerce company, has formed a
joint venture with Guolian Securities Ltd. to provide online trading services
and other value-added financial services. This is a strategic investment aimed
at further expanding the consumer business that SOHU.COM developed successfully
in 2001. Joint venture operations have already started and online trading
services will be available on the web site SOHUStock.com in the third quarter of
this year.
The joint venture (JV), named SOHU - Guolian Information Technology Co., has
a registered capital of US$ 6.0 million with SOHU owning 51% of the JV. SOHU and
Guolian Securities manage the JV jointly. Mr. Sam Qian, Vice President of SOHU
and a Wall Street veteran, has been appointed Chief Executive Officer, while Mr.
Guoping Yan, Vice President of Guolian Securities, has been named Chief
Operating Officer of the JV. Dr. Charles Zhang, CEO and President of SOHU.COM,
will participate in the JV management as a board member.
" We have made this strategic investment because at SOHU we assess
opportunities in light of our mission and performance. In 2001 SOHU's consumer
business strategy was proven with the successful development of E-subscriptions,
which include Short Messaging and Premium Services, and E-commerce. This year we
will extend this expertise into new consumer business areas such as online
trading and SOHU Online ISP services. Online trading is a logical extension of
our core assets and strategic direction towards consumer services, especially
given the tremendous market potential of online trading," explained Charles
Zhang, CEO and President of SOHU.COM
Through this strategic investment SOHU is targeting the high growth financial
sector in its early stage of development. China is one of the fastest growing
stock markets in the world with an average annual trading growth rate of 30%
from 1992 to 2001. The market for securities trading is expected to continue to
grow rapidly considering Chinese citizens' aggregate personal savings of US$ 855
billion.
Online stock trading turnover in China nearly doubled to US$43.1 billion in
2001, according to the China Securities Regulatory Commission (CRSC). It
accounted for 4.4 per cent of total market turnover of US$ 980 billion last
year, which included trade of stocks and fund units. Investors had opened 3.3
million online trade accounts by the end of last year, nearly 10 per cent of the
average number of accounts opened on the Shanghai and Shenzhen stock exchanges
last year, according to the CRSC. The global technology consultancy IDC expects
China to boast 21 million online accounts by 2005, the largest number of online
stock traders in Asia. By comparison, in late 2000 only an estimated 25,000
investors, fewer than 1 per cent, traded over the Internet.
"The recent liberalization of trading commissions makes online trading even
more appealing because full service brokers will have difficulty sustaining
their business operations at lower commission levels. This joint venture also
gives SOHU a tremendous head start as the Chinese government will open up the
financial industry under the WTO agreement and foreign companies will begin to
enter the market," explained Charles Zhang.
SOHU's joint venture partner Guolian Securities Ltd. was founded in September
1992 with Wuxi City Government as the majority shareholder. The company has
outstanding financial management and risk control, as evidenced by its No. 6
national ranking in 2001 in terms of rate of return on shareholder equity,
according to Shanghai Securities Exchange statistics. It recently gained CSRC
approval to operate as a comprehensive securities company with brokering, asset
management and investment banking services.
"The synergies are manifest. The joint venture will take full advantage of
SOHU's strong brand, 53 million registered users, Internet technology and
marketing expertise and align with Guolian's traditional securities industry's
experiences to provide high-speed, secure online trading and value-added
financial services. Soon, SOHUStock.com account holders will get great customer
value," said Sam Qian, Vice President of SOHU and CEO of the JV.
"We have entered a new stage of innovation, using the Internet to widen our
services range and overcome the physical limitations of our traditional
securities trading branch network in China. By partnering with SOHU, we will be
able to expand Guolian's reach and capabilities while getting a competitive edge
in the financial services industry," Guoping Yan, Vice President of Guolian
Securities and COO of the JV, commented.
About SOHU.com
SOHU.com is the leading Internet portal in
Mainland China with current daily page views exceeding 12 million. It provides
navigation/search, news, sports, business and finance, real estate channel,
entertainment, chat, email and e-commerce activities for a solid and wide base
of visitors. Dr. Charles Zhang founded SOHU.com in 1997. Its investors include
Intel, Dow Jones, IDG, the Morningside China Group, PCCW, Legend and Hikari. Its
content partners include CNET, DOW Jones and dozens of local media organizations
in China.
For further information:
Dahlia Wei
SOHU Investor
Relations and Communications
Tel: +86 10 6272 6598
E-mail:
ir@sohu-inc.com
http://www.sohu.com/about/English/ |
