Beijing Jingxi Tourism Development Co.Ltd. 

 Public (ShenZhen: 000802)

Company Facts:

Beijing Jingxi Tourism Development Co. Ltd. (BJTD) was initiated from national owned Beijing Jingxi Economical Development Company, which was established in 1985 by local authority of MenTouGou district, Beijing. BJTD was officially established in 1997, and after being approved by National Owned Corporation Reform Committee in 2001, BJTD transferred its ownership to its shareholders and changed from national owned company into Limited Liability Company. Earlier it was called Beijing Gede Electronic Mobile Commerce Co. Ltd.

Beijing Jingxi Tourism Development Co. Ltd. core business interest lies in three main businesses namely hotel management, tourism attractions management, and project investment with 95 per cent of its business are within Beijing area only.

BJTD owns ‘two hills and two temples’ (Ling Hill, MiaoFeng Hill, TanZhe Temple, and JieTai Temple), located in MenTouGou district, southwest of Beijing, as well as offering facilities like accommodation, entertainment, sports and games in the above tourism attractions.  The company has been continuously developing its tourism resources and actively improving its services so as to avail the great benefit of this massive tourist stream that 2008’s Olympic Games might bring along.  A yearly growth in profitability of 15% to 20% in the next two year is predicted by the company.

Financial Overview

Related companies (Subsidiaries/Holding Company/Shareholder/collaboration), percentage of share

Beijing KunLunLun Investment Co. Ltd. Holding Company, Percentage of ownership 36.37%

Beijing ShuangHeng Investment Development Co. Ltd. Holding Subsidiaries, Percentage of ownership 100%

WuYi Mountain International Garden Hotel Co. Ltd. Holding Subsidiaries, Percentage of Ownership 30%

Beijing LongQuan Hotel Co. Ltd. Holding Subsidiaries, Percentage of Ownership 99%

LongQuan Hotel Management Co. Ltd Holding Subsidiaries, Percentage of Ownership90%

Beijing LongTouGou YongDingZhen FengCun Commercial Cooperation, actual holding company, 95.33%

<u></u>Stock Health

As on 14-Jul-2008  

Open: 22.21    High: 422.98      Low: 21.76        Close: 22.81          Vol: 9,836,359        

Key Stats & Ratios

                                                                                                         Unit 10,000 Yuan (RMB)   

  <u>Comparison with Tourism Industry Average performance</u>

<u>Daily Stats (last one month):</u>

BJTC is inevitably regarded as the leading stock in Olympic related division as for the amazing performance in the past months. Shockingly, within only 14 trading days since June, the stock price of BJTC jumped from the initial bottom at 11.70 Yuan and jumped to its peak at 25.87 Yuan, at a ratio of 121% increase, that is more than double of stock price.

The stock has also shown great confidence towards Olympic related stock, companies related to this industry such as municipal infrastructure, tourism, transportation, retailing and many more are getting hot. Olympic games effect industry not only in the short-term that will increase the number of tourists but most importantly it will help in long-term, as the Olympic Games will greatly promote the tourism resources construction including tourism brand and tourism establishment construction. 

The Olympic Games also means great opportunities. According to historical statistics, its 1992 Barcelona Games achieved USD 6.048 billion, in 1996 Atlanta Olympic Games achieves USD 5.1 billion in profits and in 2000 Sydney Olympics Games earned USD 6.3 billion, respectively. So it is not surprising to see that 2008 Beijing Olympic Games in China has become many peoples dream and opportunity to great gain now and in future.

However, Olympic is not the only factor and is also definitely not some easy and ready made path to easy success. No doubt it has got investors’ attention but it is the actual business performance of BJTC which is of concern as its stock performance lately has been largely influenced by none other than so-called Olympic Fever. BJTC has reformed business structure by getting rid of non-main business projects, such as cement and material supply, merging some hotel and realty projects. This has enabled the company to lay a clear business strategy.

However, drawbacks like lacking of industrial experiences at company’s management level, operational capability in tourism attraction, hotel and commercial realty needs to be sharpened further which are the main factors to support the high stock price in long term run as there is a possibility of stock price collapsing at any time, due to outside speculation.

Consequently, DJTC has even bigger issues as in 2008’s first half-year report has revealed a total loss of RMB 10.66 million Yuan, comparing with the same period in 2007, which is 100%-150% more than formerly assumed.

The depressing business performance reveals the weak drive for the sustainable development of the company, which are not quite enough to make the company a leading position in the tourism industry as it shows in the recent stock market. Therefore, I believe, the legend of this stock is unlikely to maintain for the same in short and for long-term investors, this stock will only have good holding value if the company were to generating rapid growth in profit and maintain it for at least two years after the Beijing 2008 Olympic Games.