Glass firm's shares rise on perceived links to Zhang Gaoli
The reshuffle in Beijing provided a timely boost for one company yesterday - Xinyi Glass outshone the Hang Seng Index because of its perceived ties to a new member of China's most powerful body.
Lee Shing Put, son of Xinyi Glass chairman Lee Yin Yee, happens to be the son-in-law of Zhang Gaoli one of the seven new members of the Politburo Standing Committee.
Zhang's elevation to the topmost decision-making body had investors betting on the glass maker's bright prospects, pushing the stock as high as 4.5 per cent before it closed up 2.25 per cent at HK$4.54. The Hang Seng Index edged up just 0.24 per cent.
Responding to the buzz over Zhang, chairman Lee, however, said: "Zhang Gaoli has nothing to do with our business."
Alex Yeung, an analyst at Kim Eng Securities, said: "Xinyi has businesses in Tianjin and the market is speculating that Zhang may support the firm. Zhang's appointment is no doubt a blessing for Xinyi."
Xinyi's shares have gained 9.4 per cent in the past month, while the Hang Seng Index has slipped 0.23 per cent.
Xinyi Glass' net profit for the first six months of the year fell 43 per cent amid sluggish demand for float glass used in windows and solar panel glass, its main products.
The company may get easier access to funding in the future, Yeung said. It was looking to list its solar business arm, Xinyi Solar Holdings, in a US$150 initial public offering in Hong Kong last year but suspended it in view of the market gloom.
Wesley Lee, executive director and CEO of Xinyi Glass' solar unit, said the suspension was temporary and the company was still looking to list in Hong Kong.
Lee Yin Yee is ranked No 368 on the 2011 Forbes China Rich List, with an estimated wealth of US$520 million.
Zhang has been Tianjin party secretary since 2007. Xinyi Glass has a production base in the city and is building a complex there to make glass for cars, according to its interim report.