Mar 12, 2019 (China Knowledge) - Shares of Shanghai-listed website People.cn, the official newspaper of China’s Communist Party has surged recently, hitting the daily 10% increase limit 12 times over the last 15 trading days with its share price increasing 325% year-to-date.
The reason behind this rally is a new business called “content risk control” by the company which involves the company dispatching experience censor officials to review content of other media platforms in the country.
With the Chinese government stepping up online content controls, more content and media companies such as Tencent and Bytedance are hiring these personnel to review postings on their platforms to ensure that the content will not end up on the wrong side of the government.
As such revenue from this business has been surging rapidly for People.cn with the company’s earnings alert showing that revenue from this sector has increased by more than 160% in 2018. Overall, net profit could hit RMB 21.5 million in 2018, up 140% year-on-year.
Online content platforms such as news aggregators and apps are an important avenue for companies to acquire users and any government objection to the content on these platforms may pose large problems for these companies towards their growth.
Last year, the Chinese government had ordered Bytedance to remove its news app Jinri Toutiao from Chinese app stores for three weeks to facilitate a cleanup of its content, causing the company to lose many users in the process.
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