Telstra hopes to cash in on China's booming housing industry after spending $US254 million ($A333.5 million) to acquire a controlling stake Chinese real estate website company Soufun Holdings Ltd.
Telstra bought a 51 per cent interest in SouFun, which will be managed by the telco's directories and online advertising business Sensis.
Telstra chief executive Sol Trujillo said the acquisition will provide growth opportunities for Sensis, with China's real estate sales last year representing seven per cent of the country's gross domestic product.
"SouFun provides an attractive entry point into China, one of the world's fastest growing economies, allowing Sensis to leverage core capabilities into a larger, faster growing and less mature market than Australia, with high performing, internationally experienced local management," Mr Trujillo said.
The investment will ease analyst fears that Sensis could struggle to meet its forecast to double revenue from $1.6 billion in 2004/05 to $3 billion by 2009/2010.
SouFun will be cash flow positive from day one and is expected to contribute net revenue of $52 million to Telstra and earnings before interest, tax, depreciation and amortization of $18 million in fiscal 2007.
It will also be earnings per share accretive from year three.
Sensis' growth strategy was to expand into new geographic markets through partnerships or acquisitions.
By expanding business globally Sensis is able to take extensive experience offshore and become a leading Australian exporter of IP, while consolidating world best practices and applying them to the existing business operations to stimulate growth.
SouFun will continue to be fronted by founder and chief executive Vincent Mo, who will remain a significant shareholder with the balance of the shares held by management and venture capital firm IDG.
The SouFun.com website attracts over 40 million users per month, provides information, advertising and listing services to China's growing online real estate and home furnishing and improvement sectors.
Sensis plans to expand Soufun's reach from 40 cities in China to 100 cities by 2008.
China's booming online advertising market is expected to quadruple from $US800 million ($A1.05 billion) in revenue in 2006 to over $US3.2 billion ($A4.2 billion) in 2010.
The investment should yield relationships and credibility in China from which further opportunities might emerge.
The investment is Telstra's first in China since it formed a $4 billion alliance with Hong Kong telco Pacific Century CyberWorks in 2000.
Source:佚名