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The stocks linked to China’s missing tycoon Xiao Jianhua

PUBLISHED : Wednesday, 01 February, 2017, 4:11pm
UPDATED : Thursday, 02 February, 2017, 1:34pm

Xiao Jianhua (肖建華), ranked 32nd with his wife on Hurun’s China Rich List 2016, is estimated to be worth US$5.97 billion. A Peking University graduate, he founded his business in 1993 through three closely held units Baotou Beida Tomorrow Resource Technology (包頭明天科技), Baotou Beipu (北普實業) and Zhengyuan (正元) Investment Co., according to his April 15 interview three years ago, published on May 6, 2013 in the 21st Century Business Herald.

Here’s a list of publicly traded companies in mainland China and Hong Kong that linked to him, according to the Herald’s interview and entries in Baidu Baike.

Companies majority owned by Xiao:

Baotou Tomorrow Technology Co. (600091)

Zhengyuan owns 34.6 per cent of Baotou Tomorrow Technology Investment, while Beida owns another 3.4 per cent, according to Bloomberg’s data. Based in the largest industrial city of Inner Mongolia province, Tomorrow Technology is a raw materials producer, earning the majority of sales from manufacturing caustic soda, phenol, calcium carbide and plastic resins. It reported a net profit of 33.8 million yuan in 2015, recovering from two years of losses and declining revenues. Fiscal 2016 financial results are due on March 10. The stock has risen 18 per cent in the year through January 26, when trading was halted for Lunar New Year holidays on the Shanghai bourse.

Baotou Huazi Industry Co. (600191)

Beipu owns 5.2 per cent of Huazi, according to Bloomberg’s data. This Inner Mongolia company earns 85 per cent of its revenue from refining beet sugar and edible alcohol, with the remainder of earnings from quartz crystals and electronic components. Net income surged for three years, estimated to reach 1.64 billion yuan in fiscal 2016, from 6.87 million yuan in 2013. The company is scheduled to announce 2016 results on April 28. The stock has fallen 7.7 per cent in 12 months to 13.52 yuan in Shanghai.

Xishui Strong Year Co. (600291)

Zhengyuan owns 10.45 per cent of Xishui, according to Bloomberg. Based in Inner Mongolia’s Wuhai (烏海) city, Xishui is a cement manufacturer that also sells insurance. Its 2015 net income was 177.8 million yuan on 20 billion yuan in revenue. Fiscal 2016 results are due on April 19. The company’s stock fell 28 per cent in the past year to 19.49 yuan on January 26 on the Shanghai exchange.

Shanghai U9 Game Co. (600652)

This game and software developer was renamed in 2014 from Shanghai Ace Co., one of the first eight stocks to be listed on the city’s stock exchange in 1990. Over its lifespan, the company’s business has shifted from electronics to coal mining, to software. Coal still makes up three quarters of the company’s total revenue, which declined for three successive years. Fiscal 2015 revenue fell 15 per cent to 1.42 billion yuan, while net income swung to a profit of 74 million yuan. The stock fell 34.6 per cent to 12.17 yuan on January 26. U9’s office, sitting atop a medium height building near Shanghai’s bustling Xujiahui district, was empty during a recent visit amid the Lunar New Year holidays. Phone calls to the office were unanswered.

Companies in which Xiao owns minority stakes, according to Baidu Baike.:

China Ever Grand Financial Leasing Group (379)

The Shatin-based company, formerly known as PME Group, is a trader and producer of polishing materials and industrial abrasives. In a 2015 reverse takeover, the company issued shares to buy a Beijing-based company from its chairman Wong Lik Ping, in the process transforming its business to financial leasing. PME changed its name to Ever Grand Financial Leasing in March 2016. Net income had been declining for two successive years to HK$3.45 million in 2015, even as revenue had doubled in the same period to HK$258.6 million. The company’s shares fell 28.5 per cent in the past year, rising 3 per cent Wednesday to HK$0.10. The company’s assistant corporate secretary Joanne Shun said Ever Grand was not connected with Xiao.

Shougang Fushan Resources Group (639)

The Wanchai company mines and produces coking coal in mainland China used in steel fabrication. Revenue had declined every year since 2013, and is projected to drop 16 per cent to HK$1.69 billion in fiscal 2016. Shougang is scheduled to report earnings on March 23. Its shares have surged 83 per cent in the past year, dropping by as much as 5.9 per cent in Wednesday trading to HK$1.43

China Strategic Holdings (235)

The Wanchai company trades in pharmaceuticals, batteries, metals and securities. China Strategic was among several companies linked to property and takeover tycoon Hui Ka-Yan (許家印) in his tussle for control of China Vanke Co., holding 2.8 per cent in Vanke as of November 2016, according to a report on ifeng.com. The company’s shares have fallen 12 per cent in the past year, falling as much as 4.3 per cent in Wednesday trading to HK$0.155. Xiao doesn’t own any shares in Strategic Holdings “at the moment,” the company’s executive director Chow Kam-wah said by telephone in response to the South China Morning Post’s query.

Other mainland-listed companies in which Xiao has minority stakes include Baotou Beifang Chuangye Co. (600967), Luyin Investment Group (600784), Shanghai New Huangpu Real Estate Co. (600638), Gemdale Corp (600383) , Shenzhen Agricultural Products (000061), Huaxia Bank (600015), Industrial Bank (601166), Pacific Securities (601099) and Donlinks International Investment Co. (000893), according to his 21st Century Business Herald interview and information compiled by B aidu Baike.

Privately held companies that Xiao owns controlling stakes in, according to B aidu Baike.

Hengtai Securities, New Times Securities, Bank of Weifang

With additional reporting in Shanghai by Ren Wei.