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China Economic Net: Sanjiang Electronics Plans to Initiate IPO Oceanwide Holdings Ushers in Possibilities for Soaring Investment Income


Beijing June 19 News of China Economic Net: The listing plan of Sanjiang Electronics under the great attention of the capital market began to take substantive steps. On June 16, Oceanwide Holdings (000046) made an announcement to the public that, the Board of Directors deliberated and adopted the Proposal concerning Issuing Letter of Commitment of Elimination or Prevention of Horizontal Competition to the Joint Stock Company Shenzhen Oceanwide Sanjiang Electronics Co., Ltd. According to Oceanwide Holdings, one of the backgrounds for the above move is that Sanjiang Electronics plans to initiate IPO.

According to public information, established in October 1994 with a registered capital of RMB 60,000,000, Sanjiang Electronics is specialized in the R&D, production and sales of fire alarm, intelligent building and video surveillance products, as well as installation and engineering construction of firefighting and security products, as one of the main suppliers of fire alarm products in China’s fire protection industry.

At present, Sanjiang Electronics has three categories of products and services, namely, fire protection, security, installation & engineering construction, with independent core technology in various products. The Company has extensively applied its products in fire protection for governments, finance and public security, and realized rapid development in emerging fields such as education, intelligent building, chain supermarket and medical treatment.

As a representative enterprise in the high-tech business subordinate to China Oceanwide Holdings Group, Sanjiang Electronics has established the sales and service network across the whole country with more than 150 sales and service agencies in 32 provinces, cities and autonomous regions. In addition, Sanjiang Electronics has gradually expanded the overseas branches in the course of internationalization, and sold its products in more than 40 regions and countries such as Japan, EU member countries, South Asia and Africa.

It is understood that, as the leading enterprise in the industry, Sanjiang Electronic has applied for and obtained 135 patents, 25 of which are national patents for invention. The Company has been honored as “Top Ten Famous Alarming Enterprise in China’s Fire Protection Industry” and “Chinese Security Product Brands with Top Ten Market Share” for several consecutive years. It is the recommended brand for the building of a safe city in China and one of the most influential security brands in China.

In addition, with the expedited urbanization in China and other emerging economics, the police force is far from enough to satisfy the actual demand in the economic life for security and video surveillance devices especially. It is predicted that the video surveillance devices are still in great demand with huge market space in future. Therefore, Sanjiang Electronics will probably have great potential after listing.

One of the typical examples of the strategic layout of Oceanwide Holdings is the investment in the high-tech and emerging industry such as Sanjiang Electronics. Under the strategic framework of “finance + industry + strategic investment”, Oceanwide Holdings has always been making active investments in the finance, real estate, energy, high technology, etc.

In the financial field, Oceanwide Holdings has owned the core financial platforms such as Minsheng Securities, Minsheng Trust, API and Minsheng Financial Service Holdings after several years’ system layout and integrated optimization. It applied for the establishment of Minsheng Fund with whole capital, and applied for the establishment of Asia Pacific Reinsurance and Asia Pacific Internet Life Insurance as the main initiator. According to the annual report of Oceanwide Holdings, its financial industry realized a total operating revenue of RMB 6.049 billion in 2016 with a year-on-year increase of 40.55%.

In the real estate field, Oceanwide Holdings has formed the diversified profit model including real estate sales and operation, and investment management. In 2016, the real estate business achieved an operating revenue of RMB 18.545 billion with a year-on-year increase of 97.34%.

Sanjiang Electronics that will initiate IPO is an important weight of Oceanwide Holdings in the investment layout. The actual controller of Sanjiang Electronics is the Board Chairman of China Oceanwide Holdings Lu Zhiqiang. Currently, Oceanwide Holdings holds 15% shares of Sanjiang Electronics.

It is understood that, by the end of 2016, Sanjiang Electronics generated an operating revenue of approximately RMB 590 million and the profit of RMB 52 million with the earnings per share of RMB 0.86. The latest data of Tonghuashun display that, the average PE ratio in the security industry into which Sanjiang Electronics falls is around 40 times. Calculated on the above basis, the book value of shares held by Oceanwide Holdings will exceed RMB 300 million. If Sanjiang Electronics can be listed in the exchange successfully in future, it will lead to a soaring investment income of Oceanwide Holdings.