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HONG KONG, Feb 5, 2010 - (ACN Newswire) - China Chief Cable TV Group Limited (SEHK: 8153)("the Group") announced that it completed acquiring the entire issued share capital of Kang Yuan Universal Investment Limited, making it a wholly-owned subsidiary of the Group. Kang Yuan Universal holds 100% equity interest of Jiangsu Kedi Modern Agricultural Company Ltd ("Kedi"), which is engaged in modern tobacco agricultural technology in the PRC.
The Group plans to tap the tobacco agriculture market in the PRC via this acquisition. The PRC is the largest cigarette consumption country, accounting for approximately one-third of the total consumption in the world. The tobacco industry is the major tax revenue source to the country. The profit tax from the tobacco industry was up to RMB513.11 billion in 2009, which represented a growth of 12.2% and it is approximately one-ten of the total tax revenue of the country. In 2008, production of dried tobacco represented an increase of approximately 19.6% as compared to 2007. The PRC government has been stipulating policies of encouraging tobacco drying from using the modern drying method since 2006 including provide financial subsidy.
Kedi is founded in 2005, one of the first professional companies engaging in the tobacco leave drying industry. Currently, it is also the largest intensive flue-curing equipment producer, which has over 35% market share. For the six months ended 30 June 2009, the audited revenue was RMB324,835,000 while the net profit was RMB93,585,000. For the year ended 31 December 2008, the audited revenue and net profit were RMB234,802,000 and RMB88,760,000 respectively.
Apart from the future growth of tobacco leave drying equipment, tobacco machines and tobacco-specific fertilizers will step into the harvest period in 2010 and start contribution to the Group.
Kedi authorizes Nanjing Agricultural University and Henan Agricultural University to develop and research tobacco machines. The application of more than ten kinds of tobacco-specific agricultural machines such as planters, nursery pruners, transplanters, cultivator, pesticide spraying machines, tobacco stalk lifting machines and micro irrigation equipments have been promoted in Henan, Yunnan, Sichuan, Guizhou and Hunan, with the good effects and comments from the users. It is now stepping up the R&D in tobacco leave harvesting machines and mega drying equipment, expecting to be used in the tobacco leaves harvest period this year.
Kedi produces tobacco-specific amino acid bio-fertilizer that can greatly improve the quality of tobacco leaves, and prevent diseases, especially Wilt Disease, Blackleg Disease, and Root Nematode Disease. The prevention rate is up to 80%.
With a 20,000 square meters modern standard factory and a 10,000 square meters integrated R&D building, the administrative headquarter of Kedi is located at Yixing, Jiangsu while its operation headquarter is located at Zhengzhou, Henan. Sales and after-sales service network are spread throughout the country's major tobacco areas, such as Yunnan, Guizhou, Sichuan, Henan, Guizhou, Chongqing, Hunan, Hubei, Shandong Province, northeast China, Gansu, Ningxia, of which, offices or subsidiaries are established in major tobacco-growing areas including Henan, Yunnan, Guizhou, Sichuan, Hunan, Chongqing, Guangxi, Shandong and Heilongjiang.
Kedi employs approximately 20 modern tobacco agriculture-related experts, in which 15 are professors and 8 are State Council's special allowance experts, forming a team with strongest research power in the modern tobacco agriculture industry in the PRC.
Looking ahead, the Group plans to increase the effort for participating in tobacco agricultural modernization and to increase its market share in the intensive flue-curing equipment industry. It will promote the modern agriculture technology as well as to improve the development and production of the tobacco drying machines. It will also strengthen its relationship with the tobacco companies.
Contact:
JOVIAN Financial Communications Ltd
Angel Y Y Yeung
Tel：+852 2581 0168
Fax：+852 2854 2012
Email：angel@joviancomm.com
Topic: Merger & Acquisition
Source: China Chief Cable TV Group
Sectors: Consumer Electronics
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From the Asia Corporate News Network
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