The logo of Founder Securities Co. Ltd. is seen in Shanghai, Feb. 3, 2015. (Photo : IC)
The cumulative market value of 28 university-linked A-share corporations increased by 163 percent in the past seven quarters, from $28.64 billion (187.8 billion yuan) in March 2014 to 493.7 billion yuan on Dec. 31, 2015.
Only half of the 28 firms currently have a market value below 10 billion yuan, with Zhejiang University-affiliated United Science & Technology Co. Ltd. having the lowest market capitalization of 5.6 billion yuan.
Individual market value for 12 companies ranges from 10 billion yuan to 50 billion yuan. The market value of two firms--Tsinghua University-founded Tongfang Co. Ltd. and Peking University-linked Founder Securities Co. Ltd.--have market value above 50 billion each. The former boasts 53.6 billion while the latter has 79 billion yuan, China Daily reported.
On the other hand, China University of Petroleum-promoted corporation Shandong Shida Shenghua Chemical Group Co. Ltd.'s stock price surged to 42.25 yuan on Dec. 31, 2015, from 6.51 yuan per share on May 29, 2015.
According to the same publication, the earliest four university-affiliated firms are from Shanghai. Tsinghua University promoted six holding corporations while Peking University has four. The market value for the two groups of holding firms hit 135.8 billion yuan and 111.8 billion yuan, respectively, on Dec. 31, 2015. However, Wuhan-based Huazhong University of Science and Technology has three holding companies.
Majority of the 28 corporations are engaged in high-tech areas, whereby 10 are in telecommunications, four in pharmaceuticals, and five operate high-end manufacturing.
The market value has increased, but only 13 enterprises boast a good aggregate return on equity of 6 percent during the 2012-2014 period. At the top of the list with 20.52 percent is Shandong Shanda WIT Science and Technology Co. Ltd., a branch of Shandong University.
While 13 of the 28 companies listed their stock between 1996 and 2000, return on equity for most of them has been lackluster.
Changjiang Business Daily quoted Li Kai, an analyst with Changjiang Securities, saying, "University-linked listed companies have a sound foundation in technology, but are weak in marketing and management. So, they are unable to make big profits."
Reportedly, 17 university-affiliated corporations exited the A-share market since 2006 because of losses, profits decline or poor performance. The situation has not changed as such in terms of profit. At the end of Sept. 2015, only 13 of the 28 firms boasted a collective profit above 50 million yuan each, and more than half of the companies had an RoE of less than 4 percent.
However, experts have pointed out that because of China's emphasis on technological creativity in the 13th Five Year Plan (2016-2020) and the reform of the IPO system, more tech-savvy universities will probably found firms and list them in the near future.
