China National Aero-Technology Import & Export Corporation Shenzhen Company (CATIC Shenzhen) has officially launched a branding strategy recently - a landmark event en route to its goal of becoming a prominent international company.

The branding strategy, designed by the top global marketing company Kotler Marketing Group and consistent with the company's investment philosophy of "moderate diversification", aims at building CATIC Shenzhen into a premium brand conglomerate with a competitive edge.

As CATIC's wholly owned subsidiary, CATIC Shenzhen's business scope is not limited to the aviation industry. The company has long been known as an agile multi-industry player.

Diversification does not necessarily constitute an obstacle to the company's growth.

On the contrary, modest diversification provides a foil for complementary development of different business sectors in a conglomerate, said Wu Guangquan, president of the company.

Making full use of various resources across the group company has thus become key to portfolio strategy success, Wu noted.

He said that company staff's beliefs being identical with corporate values and the running of subsidiaries being identical with headquarters' management policies, along with cross-sector business cooperation, have created huge parenting value, which has been driving CATIC Shenzhen's sustainable growth.

Sharp market sense, professional ethics and operational efficiency have helped the group company sustain strong growth, earning more than 10 billion yuan in revenue in 2006.

Four of its subsidiaries were listed among the top 100 enterprises of Shenzhen, where the group company is headquartered. The company's successful explorations abroad in recent years have provided more room for growth.

"CATIC Shenzhen, as one of the renowned group companies in our city, has built up a good image at home and broad," said Lu Ruifeng, vice-mayor of the city.

Over 25 years of development, the company has held four domestic and overseas listed companies and a great number of subsidiaries covering various sectors.

The four publicly traded companies are Shenzhen Tianma Microelectronics Co Ltd, Shenzhen FIYTA Holdings Limited, Shenzhen Nanguang Corporation and CATIC Shenzhen Holdings Ltd.

Impressed with CATIC Shenzhen's prowess in maintaining a diversified investment portfolio, Milton Kotler, president of Kotler Marketing Group, called the integrated company a new State-owned enterprise (SOE). According to the new strategy, the company's main business will focus on six sectors - hi-tech manufacturing, real estate, retail, trade, finance and resources.

Wu said that an enterprise's value lies in seeking and collecting resources scattered about so as to make better use of resources for serving society.

CATIC Shenzhen plans to integrate resources through merger and acquisition to develop its core business, seeking to maintain a long-term competitive edge and achieve increased growth.

The company plans to make its core sectors the vanguard of their respective industries by 2010, when these sectors are expected to earn 30.5 billion yuan in revenue and 2.8 billion yuan in profits respectively, with projected returns on equity being at least 15 percent. Meanwhile, foreign trade volume is projected to reach $1 billion.

As a SOE, CATIC Shenzhen's experience in innovation has exerted far-reaching influence on China's SOE reforms.

With a belief that "development results from strategy while strategy, in turn, depends on way of thinking," the company has offered a typical case study of diversification strategy with its own success, which has helped widen the vision of SOE entrepreneurs.

Reforms and innovations, which help develop advantages and tap into the huge potential of SOEs, serve as a driving engine to promote revitalization and progress of SOEs, say experts.

(China Daily 11/17/2007 page5)