Luokung to Acquire Big Data Company to Enhance Its Vehicle-to-road Network

The acquisition of Hongda Jiutong is planned to close in the second quarter.
Mar. 29, 2022 17:47
Luokung to Acquire Big Data Company to Enhance Its Vehicle-to-road Network

(CapitalWatch, March 29, New York) Luokung Technology Corp. (Nasdaq: LKCO) announced Tuesday its plan to acquire big data service provider Hongda Jiutong to supplement its HD map business and optimize its vehicle-to-road system.

Beijing Hongda Jiutong Technology Development Co. Ltd. collects traffic information and discrete vehicle data to provide big data services for intelligent transportation and connected vehicles in China. Covering roads nationwide and reaching 10 million vehicles, Hongda Jiutong provides safe, energy-efficient, and smart transportation services to its OEM customers, including real-time vehicle operation data analysis and vehicle energy-saving solutions, according to the statement.

"Hongda Jiutong's expertise in the underlying data of vehicles will empower Luokung to achieve faster industrial implementation in autonomous driving and vehicle-road collaboration," Luokung's chairman and CEO, Xuesong Song, said in the statement today.

Song praised the expertise of Hongda Jiutong's technical team and its leader, Dr. Chuanjiu Wang, for his academic and business accomplishments in Automatic Terminal Information Service (ATIS) and big data analysis of what he called the "Internet of Vehicles."

Among the clients of Hongda Jiutong are major state Chinese automobile manufacturers FAW Group and Dongfeng Motor (OTC: DNFGF; HKEX: 0489), as well as truck and bus maker Foton Motor, a subsidiary of BAIC Motor Corp. (OTC: BMCLF; HKEX: 1958). Overall, Hongda counts more than 20 domestic and international OEMs and related enterprises as its customers.

Song called the acquisition a "strategic play" and said, "We believe leveraging Hongda Jiutong's technological capabilities with Luokung's spatial-temporal big data processing and analysis platform will greatly improve our intelligent expressway and highway data management system capabilities, which is based on HD Maps."

Hongda owns 29 patented technologies and copyrights covering aspects of automatic generation of HD map data, assisted driving, and data analysis models, Luokung said in the statement today. 

The company expects to close the deal by the end of the second quarter. The terms of the acquisition are yet to be disclosed.

Luokung provides interactive location-based services and high-definition maps in China. Among its partners are Microsoft (Nasdaq: MSFT), Ford Motor Co. (NYSE: F), Geely Auto (HKEX: 0175), and Zenseact, a provider of Advanced Driver Assistance Systems operated by Volvo (OTC: VLVLY).

Earlier this month, CapitalWatch featured Luokung as a top pick under $1 per share for exactly these partnerships and collaborations. We see significant upside potential for this penny stock since its acquisition of electronic map services provider eMapGo last year, which boosted its revenue fivefold in the nine months through September 2021.

As of midday Tuesday, shares in Luokung traded at 58 cents apiece.

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