(Yicai Global) May 14 -- The Shanghai Stock Exchange has asked Huge Leaf Co. to explain the rationale behind the pesticide maker's plans to pay CNY3.8 billion (USD599 million) for social media firm Quantum Cloud Technology Co., marking its entry into internet advertising.

The bourse is seeking further information on the main business and future strategy for Quantum Cloud, which operates 981 public WeChat accounts, it said in a statement. It also requires details on how content is generated, the correlation between the number of editors and articles published daily, and the way it plans to outsource articles.

The Deqing, Zhejiang province-based chemicals company will buy all of the media company's shares using cash and funds raised from a stock issuance as part of the firm's reorganization plans.

Founded in 2013, Shenzhen-based Quantum Cloud offers content and traffic services on WeChat, the widely instant-messaging system owned by Tencent Holdings Ltd., including a popular lifestyle channel called Kava Micro Card. The firm's WeChat accounts have 240 million followers.

Quantum Cloud had profit of CNY153 million on revenue of CNY235 million last year. After its acquisition by Huge Leaf, the company expects profit to more than double by 2020.
Editors: Emmi Laine, William Clegg