Chinese 
English
Zhou Haijiang Gave Tips on Preparing for Stock Market Launch
Published in:
By strengthening the real economy and continuously optimize the development, HOdo has cultivated another member company to go public. At 9:30 on Sep,19th, Jiangsu General Science Technology Co., Ltd., the member company of Hongdou Group, announced its launch of initial public offering in Shanghai Stock Exchange (stock code: 601500) . This is the third member company of Hongdou Group that went public after Hongdou Group held stock exchange launch in Shanghai Stock Exchange and HOdo Biotechnology Co.,Ltd announced its launch of initial public offering in National Equities Exchange and Quotations. It is not easy for a company to go public. However, HOdo, a private enterprise has successfully cultivated three listed companies within 15 years, among which two of them are main board. This is rare in China. Why HOdo is favored by stock markets? How to prepare a company for initial public offering? Zhou Haijiang, the president of Hongdou Group gave the following tips.
Tip one: persistently work on the real economy during sixty years
Zhou Haijiang mentioned that guided by China stock market, all of the three listed companies of Hongdou Group have been engaged in the real economy. Since it was founded sixty years ago, Hongdou Group has been working hard on the real economy in a down-to-earth way.
Hongdou Group has been developed from a small sized handicraft producers' cooperative established in 1957. After China launched its reform and opening-up policy, the group has developed several industries including textile and clothing, rubber tire, biopharmacy and real estate development industries etc. With 22 thousand employees working in the industry district of its head quarter, more than 400 factories and 3000 franchised stores, Hongdou Group has been ranked as the 64th among China’s top 500 private enterprises.
Textile and clothing is the traditional industry of Hongdou Group. During the years of development, the company has created two China Famous Trademarks, namely, “紅豆(Hongdou)” and HOdo, developed several series of famous brands including Hongdou men’s clothing, Hongdou house clothing, Hongdou home textiles, and Xiao Hongdou children’s wear etc., established state-certified technology center for textile and clothing, sold 130 million pieces of textile products and clothes and played a leading role in China’s textile industry with its large size industry scale.
Being the second industry of Hongdou Group, rubber tire industry was founded in the 1990s and originated from the manufacture of motorcycle tires. The company has invested more than 2 billion yuan to transform its products from motorcycle tires to truck tires with high load bearing capacity and expanded its production capacity to 4 million sets of All-Steel Radial Tires per year, and as a result, it has been ranked the first among the manufacturers in truck tire repair and replacement market for many years with its largest sales volume.
Biopharmacy is the ecological industry of Hongdou Group. The company has invested hundreds of millions of yuan to form the industry chain with 30 million Taxus Chinensis nursery-grown plants, potted landscape, health care products and medicines, and has become the world’s largest base for planting and developing Taxus Chinensis.
Real estate development is the uprising industry of Hongdou Group. When proactively participating in the development of real estate in surrounding cities and towns, the group has constructed an industry park in Cambodia, namely, the 11.13 square kilometer-special economic zone in the norodom sihanouk port of Cambodia. During 9 years of development, 102 enterprises from different countries including China, Europe and America, Japan and Korea etc. have settled down in the zone, among which 84 companies have started their production and sales and employed 140 thousand local people. The zone has been highly praised by the leaders of the two countries and has become the model zone for China’s “One Belt and One Road” initiative.
Tip two: Continuously optimize the development and become the first to implement Supply-side structural reform
Zhou Haijiang mentioned:” To promote supply-side structural reform is the latest economic strategic policy established by China. As an indicator of economy, stock market will certainly choose the enterprises with excellent supply quality.” General Science Technology is exactly the enterprise with superior supply quality.
Owing to its dedication to the research and development, manufacture and sales of All-Steel Radial Tires and Bias Tires, its adherence to the rules of behavior including credibility, thanksgiving, innovation and excellence, and its advantages in research and development, sound reputation, complete sales network, creative operation system, accurate positioning and outstanding products, General Science Technology, a modern high technology enterprise affiliated to Hongdou Group, has become the leading enterprise of China’s All-Steel Tire repair and replacement market which has guided the market segments and gained popularity among domestic and overseas customers.
Due to overseas tire markets have been dominated by the large size international corporations, General Science Technology started from Load-bearing Tires repair and replacement market and gained a rapid growth with its innovation, superior quality, and flexible and favorable prices. In 2015, the company’s products have been ranked as the 36th of the world’s tire industry and its major products including All-Steel Load-Bearing Radial Tires, Bias Truck Tires, Bias Tires for Construction Machineries and Tube and Tires for Motorcycles remain in short supply during a long period. In addition, the company has developed Short-distance Industry and Mining Tires to meet the special requirements of transportation in mines which has been horned as “The first tire for mines” with its excellent performance, Medium and Long Distance Tires for road transportation and Medium and Short Distance Load-bearing tires for logistics industry. Moreover, General Science Technology has become the first enterprise to develop two different types of technologies characterized by zero degree damper layer structure and four belted layer structure respectively for All-Steel Radial Tires, the technical functions of which comply with international standard.
In order to maintain the advantages brought by innovations and acquire the world’s most advanced technologies in a timely manner, General Science Technology has constructed Jiangsu engineering technology research center for All-Steel Load-Bearing Radial Tires and state-certified laboratories, undertaken the tasks of national and provincial torch programs, and established strategic cooperations with the world-famous enterprises engaged in the research of new materials including CABOT, the manufacturer of carbon black and Bekaert, the manufacturer of steel cord etc. when continuously developing the cooperation with domestic and overseas research institutes and colleges and universities.
General Science Technology has developed a series of products with their brand names originated from horse culture including Qian Li Ma(Fast Running Horse), Chi Tu Ma(Chi Tu Horse), Qi Ma(Qi Horse), Xi Da Tong and Tong Yun(smooth transportation) etc., among which the Qian Li Ma(Fast Running Horse) brand has been awarded as “China Famous Trademark” by State Administration of Industry and Commerce. With their brand names themed with ambitious and pioneering horses, the products developed by the company are featured with wear-proofing, puncture resistant and heavy duty, and convey the pleasing sense of “Riding on the running horse, travelling around the wonderful world.”
After going public, General Science Technology will follow the trend of Supply-side structural reform promoted by the state, undertake the strategic task of contributing products with best cost-performance ratio to the society, enhance the construction of real economy, securities, service, high-end oriented industry, diversity, intelligent products and lean management, guide the development of the industry, explore new technologies, lead the upgrading of the industry, build China’s top brands of tires, endeavor to become the world’s influential benchmark tire manufacturer in China and award its investors and the general public with excellent performance.
As a pioneer of the Supply side structural reform, the company plans to invest 757 million yuan raised from the initial public offering on the construction of the production base of All-Steel Radial Medium Long Distance Truck Tires, which is expected to expand the production capacity by 1 million pieces per year, and 49.62 million yuan on the upgrading of the Tire Technology Research Center, the introduction of the world’s advanced inspection equipment and related software, and domestic and overseas experts specialized in the research and development of tires, and the construction of first-class research, development and inspection platform.
Tip three: Grasp the opportunities brought by favorable policies, take the right path and follow the Chinese Communist Party
Zhou Haijiang said:” we have to choose the right way to go public without relying on relationships. The “right way” means follow Chinese Communist Party’s instructions and seek the opportunities from the policies made by Chinese Communist Party. “
15 years ago, It is also the opportunities brought by the policies that enabled Hongdou Group to go public in Shanghai Stock Exchange on Jan,8th.2001. At that time, stock markets were dominated by state-owned enterprises and it was rare for private enterprises to go public because private enterprises were unfairly criticized by the society. The reason why Hongdou could go public successfully is that Hongdou had gained sound reputation as a result of its compliance with the trend of reformation. In 1992, Hongdou Group played a leading role in constructing the first township enterprise group in Jiangsu province. In 1993, Hongdou Group became the first enterprise to completely implement the reform of property rights system by transforming itself from a township enterprise to a Joint-stock cooperative enterprise. In 1994, Hongdou clothing was ranked among China’s top 10 clothing. In 1995, Zhou Yaoting, the head of Hongdou Group became the newsmaker of rural China. In Apr,1997, the state council broke the convention by listing Hongdou Group into the 120 pilot enterprises undergoing deepened reformation, which created favorable conditions for Hongdou Group to enter into the mainboard market of Shanghai Stock Exchange.
After that, Hongdou Group has gradually formed the company’s philosophy, that is, take the right path and follow Chinese Communist Party, transformed the party’s advantages in politics into the company’s own advantages including the advantages of opportunities, talents and harmony, constructed an operation system integrated with Chinese Communist Party and enterprises and created a Chinese-characterized modern enterprise system which combines modern enterprise system, party construction of the enterprise and social responsibilities. Owing to these achievements, Hongdou Group has been highly praised by China’s central collective leadership and Organization Dept. of the CPC Central Committee, and has become the good example for the high degree of integration between party construction of private enterprise and modern enterprise system.
On Jan,24th.2014, HOdo Biotechnology Co.,Ltd announced its launch of initial public offering in National Equities Exchange and Quotations. The reason for the successful launch is that HOdo Biotechnology complies with the party’s scientific development view and green ecology philosophy while it is the party’s ecological civilization philosophy that motivated Hongdou group to develop its biotechnology industry.
Due to the stock market launch of General Science Technology fully complies with the party’s decision to promote the development of real economy and the reformation of supply side structure, the company successfully entered into the mainboard of Shanghai Stock Exchange.
Not only the public companies, but also the private companies of Hongdou Group follow the policies made by Chinese Communist Party and the state to seek opportunities. The special economic zone in the norodom sihanouk port of Cambodia which was found 9 years ago is a good example for the “One Belt and One Road” initiative.
During recent years, owing to Hongdou Group’s dedication to speed up the transformation and the intellectualization of clothing manufacturing and sales process, and enhance the construction of the platform of investment and financing, the industries of the company have been vitalized and powered. As a result, Hongdou Group has increased its issue of shares by 1.81 billion yuan on Aug,18th.2016.
Tip four: Enhance the mutual promotion between industry and financing. Build the enterprises with self-innovation, self-owned brand and self-owned capital.
Zhou Haijiang said:”A company cannot grow larger and stronger without financing from stock market. However, the purpose of going public is to enable an enterprise to grow faster and more efficiently through financing and then reward the investors and the general public, instead of getting money through an illegal way. Under the new conditions, industry is like the body which is fundamental, while financing is like the wing which is just an approach. Only the mutual acceleration between industry and financing can ensure a quick development. This is the key for a public company to build trust between the company and the capital markets.
Because of the interaction between industry and financing, Hongdou Group brought forward a new philosophy for the company, that is, to build “three-self” enterprises to achieve the target of win-win between eight parties.” “Three self” enterprise means the enterprise with self-innovation, self-owned brand and self-owned capital. Zhou Haijiang believes that only self innovation can ensure the enterprise to obtain the core competitiveness, influence the industry by being the leader, and get a profitable return. To innovate and lead the industry is an indispensable tool for a company to gain profit. Therefore, Hongdou Group has spared no effort in investing and constructing its technology research mechanism. At the same time, Hongdou Group has been working hard to create three famous trademarks and series of well-known brands. When viewing from the demand side, brand is the most important factor for a company to win the competition. International markets have been divided by international brands, and domestic market by domestic and overseas brands. In order to gain market share, a company has to build its own brand. From the supply side, brand is the owner of the industry chain, and a company cannot seize the initiative and advantage without owning its brands. Moreover, Zhou Haijiang mentioned that the enterprises in China shall adopt direct financing mode which is popular in America instead of debt financing in UK. Only in this way, a company can grow more rapidly. During recent years, Hongdou Group has enhanced its cultivation for listed companies, and created and participated in a series of programs for investment and financing. In general, factor markets are determined by capital, product markets by brands and self-development by innovation. At present, China economy has entered into a new stage in which self innovation, self-owned brands and self-owned capital will become the new driving force for enterprises.
“To achieve the target of win-win between eight parties” is one of the responsibilities of listed companies. This philosophy is also consist with the “win-win solution” brought forwarded by China’s Party Central Committee. To ensure sustainable development, a company has to adhere to the “win-win” philosophy, share its profit with all parties, and achieve the target of win-win between eight parties, namely, the share holders, the employees, the customers, the suppliers, the cooperative partners, the government, the environment and the society(community) of the company. On one hand, the competition between enterprises has been upgraded from competition between products and product chains to the competition within the whole ecological circle which is composed of all stake holders. On the other hand, the system of win-win between eight parties is an approach for a company to fulfill its social responsibility and construct a harmonious ecological circle where all stake holders coexist harmoniously. The “win-win” target complies with the principal of “people-centered development” promoted by Chinese Communist Party and is the fundamental guarantee for realizing Chinese Dream.
Zhou Haijiang said confidently:” When our country continuously deepen its reformation in the field of financial capital, Hongdou Group will speed up the securitization of industry and the mutual promotion between industry and financing, endeavor to properly develop the listed companies, and realize leaping development and reward the general public in a better way.