Founded in 1963, Heng Tianlixin is listed on the main board of the Hong Kong Stock Exchange in 1990. Its main business is manufacturing and selling dyeing and finishing machinery, trading in stainless steel materials and manufacturing and selling stainless steel casting products. The company is the first batch of Hong Kong businessmen to expand China's textile dyeing and finishing market. In June 2011, it was merged into China Hengtian Group Co., Ltd., the only central enterprise in China with textile machinery as its core business. The company has 6 branches and 2 offices in China, and 50 agents abroad, with a sales network in 70 countries and regions around the world, and sells more than 2200 sets of dyeing and finishing equipment to about 3000 customers around the world every year.
Main points of investment:
Mid-term performance declined in 15 years, but business in the Asia-Pacific region grew rapidly. Due to the slowdown in economic growth in mainland China, the company's performance in mainland China has declined. The company's first-half revenue was HK $1.59 billion, down 8.3% from the same period last year. Affected by the exchange rate, the company's exchange loss increased sharply, coupled with a decline in other income, resulting in a more significant decline in net profit, down 76.2 per cent from a year earlier to HK $12.02 million. However, the company actively expanded its overseas business, and revenue in the Asia-Pacific region (excluding China and Hong Kong) rose significantly by 49.8% to HK $370 million, making it the company's second largest target market. In addition, TPP (Trans-Pacific Strategic Economic Partnership Agreement) has reached a basic agreement, in which the zero tariff policy will promote the transfer of domestic textile production capacity to Southeast Asia, and the demand for dyeing and finishing machinery and equipment is expected to further increase.
China's leading supplier of dyeing and finishing equipment. The company pays attention to dyeing and finishing machinery and equipment technology and process research and development, with a total of 125 patents. The SYN-8 high temperature airflow dyeing machine developed by the company has won the "2013 Hong Kong Industry and Commerce-Machine and Machine tool Design Award" and "Textile Light 2014 China Textile Industry Federation Science and Technology Award first prize". Lixin dyeing and finishing (Shenzhen), a wholly-owned subsidiary of the company, was recognized as a high-tech enterprise in 2014 and can enjoy relevant tax preferential policies from 2014 to 2016.
Attach importance to customer demand and expand sewage treatment business. With insight into the customer's demand for environmental protection and energy conservation and the upgrading of printing and dyeing equipment, the company's R & D team has successfully developed a set of reclaimed water reuse system and equipment mainly for dyeing plants since 2007. Its "biochemical microsludge printing and dyeing water treatment technology" has been listed in the catalogue of advanced technologies for energy saving and emission reduction in China's printing and dyeing industry in 2014. At present, the company's sewage treatment business is beginning to enter the harvest period. The Ministry of Environmental Protection revealed that it will issue guidelines to deal with pollution in the textile dyeing and finishing industry, and the company's sewage treatment business is expected to benefit.
After the new plant is put into production, it will increase production capacity and save costs. The first phase of the new plant in Zhongshan was fully put into production in September 2012, and the construction of the second phase has started, and the relocation of production facilities for stainless steel casting plate and dyeing and finishing plate is expected to be completed in 2017 and 2018 respectively, when the production capacity is expected to be doubled respectively.
If you sell the original factory, you will receive at least 200 million yuan in cash compensation by the end of the 15th. The cooperation agreement for the urban renewal project has been approved by SASAC, and the company's existing factory land in Shenzhen will be redeveloped. According to the agreement, the company will receive a total of 1 billion yuan (about HK $1.26 billion) in cash in five installments through demolition compensation, and acquire new facilities properties with a total construction area of about 30,000 square meters on the land to replace existing properties. In accordance with the agreement, the company has received RMB100m in compensation as scheduled in December 2014 and will receive at least RMB200m (about HK $252 million) in compensation by December 31, 2015. the time to obtain the remaining RMB700 million (about HK $882 million) will depend on the progress of the project.
The same company will be delisted from H shares and its status will be promoted. 350.HK, the parent company, will be delisted from H shares, and Hengtian Lixin will become the only Hong Kong listed company of the parent company, which will receive the attention of the parent company in terms of capital operation.
Risk factors: the mainland economy continues to slow down exchange rate fluctuations