Softcen Secures Foothold for Entry into Tencent Ecosystem

TenCloud Decides to Acquire 60% Stake in Management Rights

[Asia Economy Reporter Lim Jeong-su] Softcen, an IT service company affiliated with the ITCEN Group, has fired the starting signal to actively promote its overseas business. It decided to acquire a 60% stake in Tencloud to secure a foothold for entering the Tencent ecosystem in China.

On the 10th, Softcen announced that it had decided to acquire a 60% stake in Tencloud International Technology Co., Ltd. (Tencloud), based in Hong Kong, for 14.5 billion KRW. Tencloud is a holding company that owns 100% of the shares of its Chinese business subsidiary, Xiamen Shude Mabang Information Technology Co., Ltd. (Shude Mabang). Earlier this January, Softcen signed a memorandum of understanding for business cooperation and share transfer with Tencloud.

A Softcen official explained, "The board unanimously agreed to acquire Tencloud to actively advance the overseas market for big data, AI education, and medical businesses held by Softcen and ITCEN Group, and to secure a foundation for new businesses." Shude Mabang, a subsidiary of Tencloud, recorded sales of 148 million yuan (approximately 25 billion KRW) and an operating profit of 22 million yuan (approximately 3.7 billion KRW) in 2019, indicating a solid performance base.

Ulti Ansu, CEO of Softcen, said about the acquisition decision, "Tencloud is a major business partner of Tencent in the mobile information service sector," adding, "Through partnerships with China's three major telecom operators?China Mobile, China Telecom, and China Unicom?it has an annual message dispatch record exceeding 5 billion messages and a stable revenue base."

He also highly evaluated that "as part of China's smart city construction projects, Tencloud is jointly developing solutions and operation platforms in the smart education field promoted by Tencent," and stated, "Since June this year, Shude Mabang has been preparing to pilot smart writing and lecture systems for some elementary school classes in Fujian Province."

He added, "Softcen is also proceeding as planned with the establishment of Softcen Shenzhen Information Technology Co., Ltd. (Softcen Shenzhen) to build an independent business base in China," and said, "The registration was completed on the 2nd, and after completing capital payment and organizational setup soon, we will concretize cooperation with Shude Mabang not only in the smart education business but also in new businesses."

CEO Ulti Ansu, who led this Tencloud acquisition, is an experienced professional manager in the Chinese ICT field, having served as Vice President of ZTE Intelligent Transportation Systems (ZTE ITS), a subsidiary of Zhongxing Telecommunication Equipment Corporation (ZTE).

Meanwhile, Kim Cheol-jung, CEO of Suan Financial Investment, the major shareholder of Softcen, said, "China's mobile app-related business is developing much faster than Korea, and there is a rapid increase in demand for B2C mobile information services in areas such as e-commerce, logistics, online finance, and app-linked services," adding, "ITCEN Group can also commercialize local businesses by combining its own AI and big data solutions with Tencloud's leading messaging services."