The Netlinkz Ltd (ASX: NET) share price has surged 12.5% higher after announcing an expansion of its Chinese distribution network this morning.
What did Netlinkz announce this morning?
Netlinkz announced that a Strategic Cooperation Agreement (SCA) has been signed between Sichuan Meixunda Communications Corporation, a wholly-owned subsidiary of China Communications Services Corporation Limited, and its China-based reseller – JAST Limited.
China Communications Services Corporation Limited is the largest telecommunications infrastructure service group in China with over 100 specialised companies that offer a range of professional services along their customers’ value chain.
According to the release, the three major telecom operators in China – China Telecom, China Mobile and China Unicorn are shareholders and customers of China Communications Services.
Sichuan Meixunda Communications Corporations, which entered into its own SCA with JAST, is a major market player and boasts the following:
- covers 20 cities (out of 21 cities) in Sichuan Province with a total population of 8l million; and
- has 381 retail stores; and
- has more than 1800 employees; and.
- is the number one reseller into China Telecom Sichuan; and
- is a direct reseller of Huawei and Samsung.
According to this morning’s release, China Telecom Sichuan has confirmed to JAST and Sichuan Meixunda Communications that it will add the Netlinkz VIN product to its product sales catalogue.
JAST CEO Yang Chuan was quoted as saying, “I am very excited that JAST has achieved a strategic cooperative partnership with Meixunda. The cooperation with Meixunda will start from Sichuan Province, and gradually expand to the five southwest provinces in China. It is a fantastic opportunity for the distribution of NetLinkz’s products.”
Where to now for NetLinkz?
This latest strategic partnership could significantly boost the market reach of NetLinkz’ products and could see further sales revenue from its Chinese operations.
NetLinkz investors have reacted positively to the news, with the NetLinkz share price climbing 12.5% higher to $0.22 per share at the time of writing.
The NetLinkz share price is up an incredible 633% so far this year as it has continued to grow its distribution network and successful lab testing of its cybersecurity products.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019