Part of our Asian Value Series
CorpXSasia is pleased to invite you to a Small Group Video call with;

In short: A cheap, solid, industry market leader enjoying margin and volume growth, potentially an A-share listing bonus

Xingda Holdings is the market leader in China of radial cords for tires (88%) and bead wires (12%). Of the main radial tire cords about 56% are destined for the truck market while 32% are used in passenger car tyres.

In the current growth climate this small but market leading company nay be seen as a somewhat uneventful business. A decade ago this company would trade at P/B values of 1.5x - 2x whilst currently it trades at a humble 0.5x P/BV whilst the company is net cash. Underneath the surface looms a wonderful cash generative business which is estimated to enjoy both strong volume growth as well as significant margin growth in 2021 and possibly the years ahead. The company has been consistently paying out dividends at growing rates.

As of the 2nd quarter of 2020 the radial cord market in China rebounded strongly and production and sales volume returned to above normal due to increased demand. After June 2020, its Thailand production subsidiary resumed to normal business with volumes significantly increasing due to pent up demand. Net margins improved due to the pass on of higher input prices hence enjoying loftier margins.

Interesting development: Potential A-Share listing 70% owned subsidiary Jiangsu Xingda.

In November 2020 the company announced plans to list its 70% owned subsidiary Jiangsu Xingda (major operating subsidiary) on a domestic exchange in China taking advantage of the current higher A-share multiples prevailing here. It introduced Pre-IPO investors for the A-share listing and applied for regulatory approval both in HK and China. The sale of a 3.35% stake of Jiangsu Xingda implied a market valuation of RMB 4.45 bn attributable to the listed company based only on the stake it holds in Jiangsu Xingda, representing 1.5 x its current market cap.

In our view this is a very interesting moment to connect with the company to discuss matters at hand and are pleased to offer the opportunity through a Small Group Video Call.

You can register below.

Background

Xingda International Holdings Limited is engaged in the manufacture and trading of radial tire cords, bead wires and other wires. The radial tire cords are used for trucks and passenger cars. The company operates its business mainly in China, India, Korea, United States of America and Germany. The Company's subsidiaries include Jiangsu Xingda, Shanghai Xingda and Xingda International (Shanghai and Thailand). Through its subsidiaries, the Company is also engaged in commercial property investments.