(Yicai Global) July 23 -- Chinese smart voice recognition company iFlytek will buy Guangzhou ETS Investment Consulting Partnership's 25 percent shares in ETS Network Technology for CNY142 million (USD21 million), iFlytech said in a statement yesterday.
The company bought 75 percent and ETS Investment Consulting Partnership kept 25 percent of shares in the target company in 2016. The target will become Hefei, Anhui province-based iFlytek's wholly-owned unit post-transaction.
iFlytek shares [SHE:002230] got off to a good start on the news, rising in early morning trading, but have since retreated, and are down 0.15 percent as of press time at CNY32.58 (USD4.73).
ETS Network Technology owns two ETS100 English teaching products for primary and middle school students in use by more than 12 million students at over 7,000 schools in 20 cities including Shanghai and Guangzhou, information on the company's official website shows.
The ETS100 Middle School courses prepares students for exams from listening comprehension, speaking, reading and writing. The company tailors the course contents precisely for each region's exam outline, uses iFlytek's voice and handwriting review technology, and builds an intelligent practice platform and other functions based on iFlytek's smart computing.
ETS 100 Primary School is an intelligent English learning product specially made for elementary students that supports learning course customization and provides feedback on English listening and oral tests.
English comprehension and oral exercises and tests will be in inelastic demand for Chinese students in the kindergarten to 12th grade stages as they are included in the National College Entrance Exam in Jiangsu, Guangdong, Beijing and Shanghai and have been extended to other provinces and cities. ETS Network Technology has achieved rapid growth in the field of English listening and speaking tests and has formed a competitive barrier. It earned net profit of CNY45 million last year.
iFlytek can further spur the target's core team to expand its market share by setting performance benchmarks and compensation and other assessment conditions, the company said.
The target's net profit after deducting non-recurring gains and losses will go as high as CNY50 million this year and CNY55 million next year, ETS Investment Consulting Partnership has pledged.
Editor: Ben Armour