Poly Tech 'won't list, seeks buys'

By Zhang Jin (Chinadaily.com.cn)
Updated: 2009-08-14 17:12

MUARA, Brunei: China's leading arms trader Poly Technologies Inc said on Friday it has no listing plan but will continue to seek opportunities to invest in domestic manufacturers.

Poly Technologies will not become a public company, as China is unlike to list or allow foreign funds to invest in its core military enterprises, President Assistant Chen Zerong told China Daily on the sidelines of an exhibition in Brunei.

Many military troop-turned companies traded their shares in recent years after the government urged to restructure heavily State-owned military industry that used to run under a planned economy.

Royal Brunei Armed Forces Commander Pehin Datu Lailaraja Major General Dato Paduka Seri Hj Halbi Hj Md Yussof (right) listens to an official from Poly Technologies Inc at the company's booth at the 2nd Brunei International Defense Exhibition on Friday. [Zhang Jin/chinadaily.com.cn]

Nearly 70 military industrial companies went public in Shanghai, Shenzhen and Hong Kong, Great Wall Securities said in a report. But most of these firms were not "core military enterprises", Chen said.

They either manufacture products for both military and civilian uses or stay away from core military technologies.

"It is arduous to restructure core military enterprise into join-stock ones," Chen said, without elaborating on the difficulties.

A shareholding system must be established before a company can go public, according to China's listing rules.

As the trading arm of conglomerate Poly Group Corporation, Poly Technologies is one of the 10 Chinese companies that are allowed to export munitions. The company, which sells more than weapon, trades more than $1 billion worth of goods annually.

Two of Poly Technologies' sister companies – Poly Real Estate and Poly (Hong Kong) Investments – have traded shares in Shanghai and Hong Kong, respectively. Poly Technologies will continue to invest in domestic manufacturers, Chen said.

Mergers and acquisitions "have already become common" in China's military industry, she said, adding that Poly Technologies also held stakes in some manufacturers. She didn't elaborate further.

Chen is leading a team of more than 10 to run a booth at the 2nd Brunei International Defense Exhibition. The four-day event, which has attracted 300 exhibitors from 40 countries, will conclude on Saturday.