The HNA Group announced that its total revenue last year reached RMB 188.1 billion. The company has so far listed 10 subsidiaries on A Share and H Share markets, eight on the New Third Board market and one to be listed on the New Third Board after passing the review of National Equities Exchange and Quotations (NEEQ) System. Four more group affiliated companies have submitted their applications for listing and are being reviewed.
A strategy across industries
HNA Group’s listing on the New Third Board span the industry sectors of finance, internet, aviation and logistics. The group’s first listing on the New Third Board was Lianxun Securities, listed on August 1 2014. The company has achieved robust growth since the listing, increasing its market value to RMB 7 billion by June 2015, compared to its value of only RMB 626 million the year before the listing.
The internet sector is another key area which HNA Group eyes for its New Third Board strategy. eKing Technology, one of HNA’s subsidiaries in the internet sector that handles outsourced software development, was listed on the New Third Board on December 21, 2014. In December 2011, HNA completed its acquisition of CAISSA Touristic and on January 30, 2016, CAISSA announced that its 2015 performance forecast was between RMB 190-210 million.
HNA Group’s bread and butter business, aviation, is also maintaining a presence on the New Third Board. The group’s subsidiaries, New Flying and HNA Capital Helicopter, were listed on New Third Board respectively in April 2015 and May 2015. In January 2016, three other HNA affiliates – Zhi-jing International Ship Management, HNA Hospitality and HNA Club Vac – also submitted applications for New Third Board listings.
Financing for strategic expansion
HNA Group’s New Third Board strategy is aimed to raise funds, and the companies listed on the New Third Board have achieved explosive growth after they announced their financing packages. The group’s first subsidiary to get a New Third Board listing, Lianxun Security, whose net worth was only RMB 620 million during the previous fiscal period, received financing of RMB 1 billion shortly after announcing its IPO plan even before it was officially listed after getting the approval from the NEEQ system review.
Lianxun completed another round of funding of RMB 2.79 billion in April 2015. The company’s total revenue in 2015 reached RMB 1.55 billion, with RMB 480 million in net income. By the end of 2015, the value of the company’s net assets reached RMB 4.42 billion, about seven times more than two years ago.
HNA Cold Chain, a cold chain logistics company which ran into the red in 2012 and 2013 and only managed to turn around in 2014, got a New Third Board listing in January 2015. The company launched its IPO plan three months later and in July, it had completed its first round of funding with a total of RMB 1.7 billion, which was 70 times its net worth.
The HNA Group subsidiaries listed on the New Third Board have so far raised a total of RMB 5.638 billion, and an additional RMB 8.09 billion in the pipeline. All up, the listing have brought in funding of RMB 13.7 billion in total. (Translation by Jerry)