Futu News September 5th: $SYNTRUST GK (08629.HK)$ The dark pool opened high today, with a 20.4% increase to HKD 11.92, a turnover of 1.7071 million Hong Kong dollars, and a total market value of 0.404 billion Hong Kong dollars; 500 shares per lot, no handling fees, earning HKD 1010 per lot.
Market source: Futu Securities >
Investment highlights
With strong shareholder background, the company's structure is stable: From the shareholder structure of Jixin State Control, the Jixin Housing and Urban-Rural Construction Bureau's subordinate business unit, the Jixin Construction Project Quality and Safety Affairs Center, holds 56%, the Jixin Finance Bureau holds 14% through Jixin Xinhui, and the remaining 30% is held by public shareholders. The government-backed shareholder composition provides the company with a relatively stable capital support, effectively guaranteeing the stability of the company's structure.
Policy drives demand, regional resource integration: Under the strong promotion of the national 'Rural Revitalization' and Guangdong Province's 'Hundreds of Millions Project' policies, the demand for independent testing and inspection services continues to grow. In the Yueshi region where Jixin State Control is located, the independent testing and inspection services market is mainly composed of localized small and micro enterprises, showing a clear trend of dispersion. Jixin State Control's state-owned background may provide it with a certain development advantage in the current market environment. With the support of government policies, the company has the opportunity to enhance its business layout through strategic deployment and market expansion, including possible M&A activities.
Risk warning
Vulnerable to the real estate market: The prospectus shows that during the reporting period, Jixing National Controls provided construction testing services to real estate developers, construction companies, state-owned investment companies, among others. Real estate developers are one of the main customer types for the company, and the number of customer projects is affected by macroeconomics and fixed asset investments. The company cannot guarantee the sustainable growth of the construction and infrastructure market or the absence of market downturns.
Relatively single revenue source: Jixing National Controls disclosed in the prospectus that, in order to comply with relevant regulations or for voluntary testing purposes, its clients seek its testing and inspection services. During the reporting period, 99.4%, 98.9%, and 99.3% of the company's revenue came from testing reports issued to clients for regulatory compliance. Most of Jixing National Controls' client requests are due to regulatory requirements rather than voluntary testing purposes. The company cannot guarantee maintaining long-term cooperation with existing clients in the future, which may have significant adverse effects on the company's profitability and business performance.
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Editor/Jamie