Huayang Technology and Shandong Dacheng Meets *ST Summary: Huayang Technology and Shandong Dacheng both witnessed special treatment of delisting warning in stock market.
Tag: herbicide, Huayang Technology, Hongda Mining, handong Hualian, pesticide, thermoelectricity, investment, stock market However, Huayang Technology's rescue plan can't alleviate the worry about its dangerous situation, especially without the support from the assets exchange with Zibo Hongda Mining Industry Co., Ltd. (Hongda Mining). Because Hongda Mining participates two assets reorganizations at the same time and in the same industry, the assets exchange between Huayang Technology and Hongda Mining wasn't approved by CSRC in consideration of business independence and fair competition (Herbicides China News 1203: Assets exchange of Huayang Technology blocked). That is to say, Huayang Technology has to risk its future to drive its performance in 2012, the critical year for the company, according to CCM Internationalâ€™s April Issue of Herbicides China News.
In comparison with Huayang Technology, Shandong Dacheng has more potential for its performance rescue because the assets exchange between Shandong Dacheng and Shandong Hualian Mining Co., Ltd. (Shandong Hualian) is still in process at present. If the mining assets are injected into Shandong Dacheng successfully, Shandong Dacheng will probably overturn its deficit in 2012. But there are still many uncertain factors in this assets reorganization and it's hard to predict now whether this assets exchange can be approved smoothly by the Chinese government.
It's noteworthy that Shandong Dacheng's deficit value in 2011 was especially huge, almost six times larger than that in 2010. To some degree, this huge deficit value will stimulate Shandong Dacheng to push its assets exchange aggressively. As expected by Shandong Dacheng, the company has to put more efforts to enhance its profitability through the assets exchange with Shandong Hualian.
No matter which way the two companies will choose to rescue their performance, it's believable that current major businesses such as pesticides in Huayang Technology and Shandong Dacheng are very weak. Hence, whether pesticide business can recover the two companies' performance in a short term is still a puzzle now.
In the past history, Huayang Technology and Shandong Dacheng were dragged down to a different extent by weak major businesses (Herbicides China News 1102: Huayang Technology's share auctioned publicly and Shandong Dacheng suspends share trade for the reorganization).
It's rumored that, in a large manner, the heavy deficit of Shandong Dacheng last year was because of its thermoelectricity investment, one of Shandong Dacheng's major businesses at present.
Source: Herbicides China News 1204 http://www.cnchemicals.com/Newsletter/NewsletterDetail_11.html
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