BNN Technology PLC Local Government partnership for mobile payments (6643E)

TIDMBNN

RNS Number : 6643E

BNN Technology PLC

10 May 2017

10 May 2017

BNN Technology PLC

("BNN" or the "Company")

Local Government partnership for mobile payments

-- Important new B2C sales channel for all of the Group's services, complementing the existing Xinhua News Mobile App and accelerating the Group's B2C platform strategy

-- Provides convenient access via mobile to essential local government services in hundreds of major Chinese cities and counties

-- Access to a higher volume and higher quality of user data to enhance cross-sell opportunities for the Group's other payment and service offerings

BNN Technology (AIM: BNN), a London-listed Chinese technology, content and services company, today announces a partnership which will see the company facilitate online payments for local government services via mobile. This agreement accelerates BNN's business-to-consumer (B2C) technology platforms offering in the Chinese mobile payments space, both within the existing Xinhua Mobile News App channel and through local government apps.

Local government services in China are at present provided and paid for almost exclusively offline at physical outlets. Each of the approximately 2,800 local counties and cities in the country's 31 provinces has separate local government departments responsible not only for municipal services, but also for controlling local utilities, car penalties and fines, licence applications, local taxes and key personal data relating to residents. At present, Chinese citizens in rural China need to physically visit each respective local government department or its designated affiliate to access or pay for municipal services, which is time consuming and highly inefficient for both users and local governments. Local authorities are now seeking to make these offline activities more accessible through mobile apps. The Group's technology platform will provide this functionality and the interfaces between citizens, payment providers, local government departments and their commercial partners.

Local government apps ("Local Apps") have already been launched by our partner to establish a convenient and secure mode of interaction between Chinese citizens and local authorities, with a large number of key services and payments app-enabled, which we believe is the first of its kind in the Chinese market. Interfaces have already been built with 600 of the approximately 2,800 local offices and coverage is planned to increase to approximately 1,500 cities and counties, a large majority of which we anticipate to have been built by the end of 2018.

The Group will provide a payments fulfilment platform, technical services, data management and management expertise. Work will commence on the project immediately and mobile payments are expected to launch using BNN's technology platform in initially two provinces, Yunnan and Shandong, during Q3 2017. Once the demonstration model has been successfully tested, launch is planned in up to eight further provinces.

In April 2016, we announced the intention to offer B2C payment services through the Xinhua News Mobile App, and have subsequently announced that 12 provinces have agreed to launch mobile payments facilities through this App. Rolling out BNN's B2C platform requires building thousands of interfaces between the platform and third parties, such as local government, utility companies and mobile phone providers. The Local Apps will connect seamlessly with the Xinhua News Mobile App, enabling Xinhua's more than 140 million users to instantly access a wide range of payment services through the existing interfaces already operational on the Local Apps together with those which will be developed in the coming months. Therefore, this new agreement not only complements the Xinhua partnership, but also allows us to accelerate the rollout of the Group's B2C offering, with potential for higher margins than can be achieved with B2B revenues.

The Local Apps have the potential to become a material new sales channel for BNN's technology platform, given the anticipated demand for access to local government services and information via mobile, and therefore also to generate substantial volumes of data. Not only does it provide the potential for the Group to reach a significantly larger userbase, but as the implementation rolls out, the incremental margin enhancement together with areas of exclusivity will also create the potential to drive B2B market share.

The Group will provide its services on an out-sourced basis, and will provide working capital, in return for a share of profits from the Local App. The Group has committed to invest up to RMB13m (GBPGBP1.4m), by way of a loan, and will also carry its own costs in terms of staff and hardware deployed on the project.

The Group will gain access to data on users of the Local Apps, which will create opportunities to sell other products and services to these users, such as the motorist services platform (announced 9 March 2017), student recruitment platform and credit services reporting platform.

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR").

Darren Mercer, Chief Executive of BNN Technology, said:

"This key and exciting partnership presents an important additional sales channel for the Group, and also presents an opportunity to provide Chinese citizens with easy access to essential everyday services at the local level. New interfaces, combined with new services, some of which will be exclusive, a larger audience and higher quality and completeness of data, will enable us to expedite the rollout of our higher margin B2C offering. The local government channel broadens the reach of our existing platforms and will add significant value to the student and credit services reporting initiatives currently being developed by the Board, whilst positioning us as a high-quality technology provider to local governments and their commercial partners."

ENDS

For further information, please contact:

 
 BNN Technology plc 
  Darren Mercer, Chief 
  Executive 
  Scott Kennedy, Chief 
  Financial Officer 
  Stephen Benzikie, Communications    [phone] 
 Brunswick Group (Public 
  Relations) Brian Buckley 
  / Diana Vaughton                    [phone] 
 Strand Hanson Limited 
  (Nominated & Financial 
  Adviser) 
  Andrew Emmott / Ritchie 
  Balmer                              [phone] 
 Mirabaud Securities LLP 
  (Broker) 
  Peter Krens                         [phone] 
 

About the Group

BNN Technology plc is a Chinese technology, content and services company that builds long-term partnerships to deliver China's citizens with value-added services, content and evolving opportunities.

Listed on AIM since 2014, the Group principally engages in providing technology to partners to facilitate fulfilment of payments online and on mobile apps through partnerships or affiliate agreements with corporate and key government partners, and developing digital content, both online and mobile. Through NewNet and its partnership with Xinhuatong, BNN facilitates mobile payments, through its technology platform, on the Xinhua News mobile app in 12 provinces in China. The Chinese consumer shift to 'life on mobile' is only just beginning and BNN's platform technology enables urban and rural communities across China to access exclusive content and pay for more services online.

The Group employs nearly 300 professionals throughout China.

This information is provided by RNS

The company news service from the London Stock Exchange

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May 10, 2017 02:00 ET (06:00 GMT)