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Yangtze China Investment Ltd

  • BY: Andrew Hore |
  • POSTED: 23/08/2011 |

China-focused investment company Yangtze China Investment Ltd is looking to raise more cash from investors or via an exit from one of its four investments.

There was still $1.2m in the bank at the end of March but that is not enough to make a new investment in another business. In May 2008, Yangtze raised $25.4m gross at $1 a share but management had hoped to raise nearer to $100m.

Chinese GDP growth is expected to average 8% between 2011 and 2015. Yangtze focuses on consumer-related businesses. The consumer market represents a strong growth opportunity even though the Chinese government is taking measures to hold back inflation. Second tier cities are the focus of expansion.

Beauty spa franchise operator Aesthetic International has been hit by increased competition and its profit has fallen. There was a small decline in the value of the investment in Aesthetic but since 2008 it is still valued at $11.9m. This is the business that is closest to a listing. Yangtze owns 25% of Aesthetic.

V2 focuses on wedding and portrait photography, which is a growth area. Yangtze invested $3.74m at the end of 2010. This was its most recent major investment.

The other two investments are Arigata Holdings Inc, known as Onbest, which develops point of sale technology for cash registers and handheld cash machines, and Creative Picture Development, which has developed display technology that transforms 2D images into 3D images. If the fad for 3D continues then more content will be required.

Net asset value was $0.89 a share at the end of March 2011. At a price of $0.75 a share, Yangtze is valued at $19m.

Download the August 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFAugust2011_23.pdf

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