Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CFO of the Year
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
February 21, 2017 01:00 AM

Feeling undervalued, China XD Plastics eyes leaving Nasdaq

Steve Toloken
Assistant Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Nasdaq
    China XD Plastics Co. Ltd. officials, when the company was first listed on the Nasdaq exchange.

    The chairman of China XD Plastics Co. Ltd. and an affiliate of private equity firm Morgan Stanley are making a bid to take the large automotive plastics compounder private and delist it from the Nasdaq Stock Market.

    The Feb. 17 joint announcement by XD Chairman Jie Han and Morgan Stanley Private Equity Asia III comes after several years of investor complaints that the company's stock price is significantly undervalued.

    In filings with the Securities and Exchange Commission, Han and Morgan Stanley said they will spend $91 million to buy the 26 percent of the company they both do not already own.

    Han and Morgan Stanley said their offer of $5.21 a share is a 29 percent premium over the company's stock price for the 30 days before Feb. 17. Morgan Staley had invested $100 million in XD in 2011 and currently owns 24 percent of the company.

    XD, based in the northern Chinese city of Harbin, said it was the first plastic composite materials maker from China to list on Nasdaq. It has grown rapidly in recent years to become a large supplier of compounded plastics in China's auto market.

    But the company faced repeated complaints in 2015 and 2016 from investors, including Morgan Stanley, that XD's stock market value was too low, especially compared to other plastics compounders listed in the Chinese stock markets.

    Those complaints were raised again at a Nov. 9 conference call about the company's third quarter earnings, when several analysts pressed for stock or cash dividends and questioned whether the company was holding too much cash and being too conservative in maintaining “rainy day” funds.

    XD Chief Financial Officer Taylor Zhang told analysts that the company understood concerns that its low valuation has been a “drag” on some aspects of its performance.

    “That valuation is a drag, we can totally see that,” Zhang said. “In the marketplace, especially when we compete with our domestic competitors, who can afford very high multiple valuations, we do have some limitations in terms of competing with them.”

    While Zhang said the low valuation did not hurt the company's operations, research or technology development, analysts said it was a detriment to bringing in new investors.

    Speaking through a translator, Han told analysts in the November conference call that the company's global strategy, including significant new investments in factories in China's Sichuan Province and in Dubai, was taking shape.

    He said that because those major capital investments were finishing up, the “optimal time to considering issues of dividends is about to come.”

    The Sichuan plant is a huge investment for XD — it will nearly double the company's annual production capacity in China to 690,000 metric tons (1.5 billion pounds).

    XD said in a news release that a special committee of its independent board directors would evaluate the offer, hiring their own financial advisors, and make a recommendation.

    Han and Morgan Stanley said they “will not move forward with the transaction unless it is approved by such a special committee.”

    While it has not yet released 2016 figures, in November it estimated full year revenues between $1.0 and $1.1 billion, with net income between $100 million and $110 million.

    XD said its materials, including various nylons and other engineering plastic compounds, are used in exterior and interior trim in 28 automobile brands made in China, including Audi, Mercedes Benz, Buick, Volkswagen and Toyota.

    RECOMMENDED FOR YOU
    Auto lighting supplier ZKW invests $108M to further expand Mexico plant
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Production outages push PP prices higher
    2
    Florida beats out Las Vegas, Chicago for NPE through 2033
    3
    MAPP announces 2023 Innovation Award winners
    4
    Holcim adding capacity, looks for growth in roofing sector
    5
    Illinois molding company owner arrested on child pornography charges
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CFO of the Year
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified