(Yicai Global) May 29 -- Shares across China’s broadcasting sector soared over 4 percent after it was announced yesterday that a new network firm, funded by 11 listed Chinese radio and television companies, is to be formed. The move will help bring together a fractured industry that has greatly hampered its competitiveness and pave the way for the roll-out of fifth-generation network capabilities.

Shaanxi Broadcast and TV Network Intermediary Group [SHA:600831] led the gains, rising by the exchange-imposed daily limit of 10 percent to CNY8.64 (USD1.21). Nine of the participating firms logged advances of between 3 percent and 9 percent.

Tentatively called China Broadcasting Network LLC, the new joint-stock firm will be responsible for the unified operation of the national cable television network in accordance with a national directive given on Feb. 25, according to statements released by some of the investors. Neither the amounts involved nor the shareholding ratios were disclosed.

China's radio and TV industry has always operated separately and this has led to a lack of progress, a failure to compete with internet companies and a continuous drop in the number of subscribers, China Securities Journal reported, citing Zhao Lin, chief analyst for the media industry at Huaxi Securities.

The new firm will operate under the direction of China Broadcasting Network, operator of the country’s national radio and TV channels, which won the license to offer commercial 5G services in January. However, the permit has yet to be implemented due to the disconnected state of the country’s radio and TV network.
The new entity might realize a backdoor listing through Beijing Gehua CATV Network, market observers said. Gehua CATV [SHA:600037] suspended trading on May 27 on

announcing that its parent firm Beijing All Media and Cultural Investment and Development Center is preparing to sell its majority stake in the firm, most likely resulting in a change of ownership for Gehua CATV, it said.

Editor: Kim Taylor