China’s e-commerce giant Alibaba (NYSE: BABA) has agreed to invest RMB 407 million (USD 57.5 million) in Shenzhen-based firm Aisidi Co in a move to assist the traditional consumer tech distributor to digitalize its sales channels, according to a filing of Aisidi (SZSE: 002416) on Monday.
Aisidi plans to issue 79.1 million new shares to Alibaba in a private placement, as per another filing of Aisidi, which prices each share at RMB 5.15, marking a 20% discount against the average closing price of its stock in the past 20 trading days.
Following the disclosure, Aisidi’s stocks went up 10% —the highest fluctuation limit in China’s capital market— to hit RMB 7.79 per share at today’s trading session.
Aisidi distributes smartphones, personal computers, and smart wearables of various tech companies to over 100,000 brick-and-mortar stores across China, including nearly 100 self-owned stores, focusing on brands such as Apple and Huawei.
The investment will allow Alibaba to gain a 6% stock in Aisidi, according to the third filing of Aisidi on Monday.
This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.