Published: 10 May 2005
Richina Pacific Ltd chairman John Walker told the company’s annual meeting in Auckland today it would seek global operating companies as partners to help it realise the value of the operating companies & real estate it controls & owns in China.
Mr Walker said Richina, owner of a leather business near Shanghai and, in New Zealand, Mainzeal Property & Construction Ltd, was transformed when it bought the Shanghai Leather Co recently.
It now had an extraordinary asset base in China and could leverage its “China knowledge”.
Mr Walker most international businesses would establish operations in China sooner or later, and many would choose to do so through a “trustworthy partner” with an established China track record rather than try to go it alone.
He said Richina, with its structures, experiences, local knowledge & western-based governance structure, could leverage an international partner’s proven business models, technical know-how, brands & distribution.The Shanghai Leather acquisition brought ownership control & interests in more than 50 former Chinese state-owned enterprises, and controlling rights over 43 parcels of land in Shanghai.Mr Walker said Richina now operated in 4 broad sectors – finance, land, industries & services – and its role had changed to one of “linking China & the world”. He said property & land development there would become a very significant business for the company.”We will not be able, nor should we try, to develop all the assets we currently own in China through our own resources. We need to attract the involvement of global partners, both operationally & financially, and we need to work as partners with the best world-class architectural firms, property developers, construction firms & contractors.” The changed nature of Richina’s business meant it would need significant amounts of capital, which could come from issuing new shares or co-investment with related & unrelated parties. Mr Walker said the board & management were working out long-term funding plans, and shareholders would be asked to consider options at the next annual meeting.As for the present, Mr Walker said that after the first quarter trading was on target for a better result than last year. The first-quarter net profit of $US138,000 compared to a $US800,000 loss last year. Revenue rose 42% to $US107 million. Richina intends reporting quarterly in future, and also to seek a Singapore listing at some stage.