Tianjin Economic-Technological Development Area Co. Ltd.

Public (SZ: 000652)

Company Facts:

Tianjin Economic-Technological Development Area Co. Ltd. (TEDA) was known as Tianjin Meilun Chemical Factory, located in Tianjin, which is one of four metropolitan cities of China. Approved by Tianjin Industrial Administration Bureau, Tianjin Meilun Co. Ltd. was established in 1992, and officially changed its name into Tianjin Economic-Technological Development Area Co. Ltd. in October 1997.

TEDA currently has 3 holding companies, 7 shareholding companies, and 14 subsidiaries, engaged in transportation, energy, air-purifying liquid filter material, high-tech industrial investment, chemical fiber filter, clothing and textile industries. The company’s main focus is on regional development and financial shareholding investment sector.

TEDA has started up two regional development projects: first, spread over 11 square kilometers, Yangzhou Guanling Newtown regional development project; second is the 540 Mu (1 Mu= 667 square meters) eco-economical creative research & development society project in Chendu Dujiangyan Qingchengshan.

Moreover, TEDA’s gardening sector has continuously for 11 years been achieving ‘Green Protector Horner’ award in eco-economical gardening designing and maintenance. In year 2007, the company had done 95 gardening construction, 45 gardening design and 53 flowering projects.

In addition, TEDA has also developed self-design and self-manufacturing third generation TEDA wool manufacturing line. It is regarded as a great achievement in clean material industry. In the future, this sector is expected to bring stable returns to the company.

Regarding environment protection sector, TEDA Wuqing solid waste project has also started commercial operation at capacity of dealing with 200 tons solid waste per day; TEDA Zaozhuang City Taozhuang solid waste project in Shandong province is also in process, which is at capacity of 480 tons solid waste per day.

With respect to financial shareholding investment sector, TEDA has gained net profit of RMB 1.032 billion, and have gained substantial return on investment from Bohai Securities in 2007. The company also plans to become holding company of Sihuan Pharmaceutical Co. Ltd. and increased its shareholdings of Beijing International Trust Co. Ltd.

Financial Overview

Related companies: (Name, relationship, and percentage of ownership/rights & interests):

Bohai Securities Co. Ltd. Shareholding Company,

Tianjin TETA Group Co. Ltd. Holding Company, percentage of rights and interests: 33.75%

Nanjin Newtown Development Inc. Holding subsidiaries, percentage of rights and interests: 51%

Shanghai Tianjin TEDA Eco-economical Product Sales Co. Ltd. Holding subsidiaries, percentage of rights and interests: 90%

Tianjin TEDA Environmental Protection Co. Ltd. Holding subsidiaries, percentage of rights and interests: 99.87%

Shanghai TEDA Realty Development Co Ltd. Holding subsidiaries, percentage of rights and interests: 100%

Tianjin Tianma International Club Co. Ltd. Holding subsidiaries, percentage of rights and interests: 90%

Tianjin TEDA Clean Material Co. Ltd. Holding subsidiaries, percentage of rights and interests: 90%

Tianjin Meida Co. Ltd. Holding subsidiaries, percentage of rights and interests: 55%

Tianjin TEDA Eco-economical Gardening Development Co. Ltd. Holding subsidiaries, percentage of rights and interests: 95%

Tianjin City Tianrunmeilun Taxi Company, Holding subsidiaries, percentage of rights and interests: 100%

Tianjin Meilun Realty Development Co. Ltd. Holding subsidiaries, percentage of rights and interests: 100%

Tianjin TEDA Eco-economical Trading Co. Ltd. Holding subsidiaries, percentage of rights and interests: 90%

Tianjin Hengtai Taxi Co. Ltd. Holding subsidiaries, percentage of rights and interests: 65%

Tianjin TEDA Investment Holding Co. Ltd, Actual controller, percentage of rights and interests: 100%

Stock Health:

 As on 24 July, 2008

Open: 7.80     High: 8.06   Low: 7.27   Close: 7.98   Vol.:  5,997,806                 

Key Stats & Ratios

     Unite: RMB 10,000 Yuan

Daily Stats (last one month):

TEDA has been successful in the Nanjing Newtown Project, and won competitive advantage in regional development sector as it has matured business modules, operating system and experienced team. The company is now seeking an opportunity to enter Binhai New District market in Tianjin while operating in Jishan software district project and Yangzhou Newtown & Qingchengshan projects. However, the very nature of large-scale regional development sector has decided slow investment returns which will probably put immense pressure on the company’s capital turnover.

TEDA’s business strategy for gardening sector is ‘Based on Economical-Technological Develop Area of Tianjin, and expand country-wide’. It has been hugely successful in the past; however, along with fast growing in eco-economical gardening industry, the increased competition has drawn down the profit margins.

With regard to TEDA’s clean material sector, the company plans to shift their focus from research & development to sales by balancing supply to military market, consumer market and international market. 

The financial shareholding investment sector of the company has been so far successful, but it largely depends on the Chinese government’s macro adjustment policy and cyclical fluctuation of stock market. Therefore, operational risks are inevitable.

Throwing some lights on the market performance of TEDA’ stock, the stock price has been cut into half since May 2008 along with the stock market’s depression. In my opinion, the recession of this stock is temporary. Investors should not hesitate too much although industrial ranking of TEDA has also dropped from number 4th to 40th among 45 competitors, as it is the comprehensive affect of heavy investment in regional development sector and financial shareholding sector in the first half of year 2008, and the investment will in return bring considerable rewards and improve the overall performance of the company in the future.

After certain time, once the Olympic plate stocks cool down and the return on investment of TEDA starts showing, I believe, this stock will pick up and reward its investors in a big way. At the moment, the stock price is just started moving upward with timely fluctuations, therefore, it is a chance for investors to buy-in. Shareholders should not hesitate, as a company with comprehensive strength and reasonable business structure will show better performance in the future.