Main source: Story in Securities Times
DUE TO favorable new agricultural policy and real-time demand, there are at least seven China-listed counters that are likely to hit the ground running in 2013.
A good part of the newfound optimism stems from the recent announcement from China’s Cabinet – the State Council – that transaction fees for share trading activity will be lowered, along with several other measures that can be considered market friendly for farmers.
Particularly promising for China’s farmers -- and shareholders of agri-centric listcos – is the move that would reduce water and electricity costs for the nation’s food producers.
Shenzhen Agricultural Products Co Ltd (SZA: 000061), a wholesale market play which distributes fresh fruits and vegetables to retailers, is expected to be a major beneficiary of this measure as its suppliers will be able to offer their produce at much lower prices.
The Cabinet announcements also include plans to standardize electricity and water rates for livestock and fruit/vegetable producers so as to give all farmers equal opportunities to make a profit in the open market.
This is good news for China’s countless hog husbandries and the dozens of A-share listed firms that depend on pork producing enterprises.
Prices for water, gas, heat and electricity will also be standardized for agricultural wholesalers and traders, as well as power costs for cold storage facilities across the country.
Other industry-friendly measures include reducing sales taxes/surcharges on agricultural product transactions in foodstuff markets, cracking down on predatory lending to food-stall renters, making the agricultural supply and distribution chain more “green,” and eliminating excessive logistics fees that cripple innovation and expansion in the sector.
CNInfo Service Index (SZA: 399320) is likely to see dividends from the standardization campaign, as well as meat and produce transporter China Railway Tielong Container Logistics Co Ltd (SHA: 600125).
Also seen riding the new policy and demand drivers are logistics and trading giants Zhongchu Development Stock Co Ltd (SHA: 600787), Jiangsu Feiliks International Logistics Inc (SZA: 300240), Jiangsu Xinning Modern Logistics Co Ltd (SZA: 300013) and Eternal Asia Supply Chain Management (SZA: 002183).
Foodstuffs are generally grouped with pharmaceuticals as being “recession proof.”
But with China’s economy and A-share markets showing a bit more life of late – alongside the newly announced pro-agriculture policies – these seven listcos are some of the most likely to enter 2013 off and running.
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