Shunho Shares Hit Limit Up Again as Hemp E-Cigarette JV Takes Shape
Tang Shihua
/SOURCE : yicai
Shunho Shares Hit Limit Up Again as Hemp E-Cigarette JV Takes Shape

(Yicai Global) Feb.  20 -- Shares in Shunho New Materials Technology hit the 10 percent  maximum allowed daily gain on the Chinese stock market again today after  it received the formed a joint venture to develop electronic cigarettes  and other products based on industrial hemp.

The Shanghai-based  firm's stocks [SHE:002565] rose 10.06 percent to CNY8.64 today, having  previously hit the limit up for seven consecutive days in January when  it got the nod to start hemp-planting in the country's southwestern  Yunnan province. 

Shunho  majority-held unit Luxin Electronic Technology, Yunnan Hansu  Biotechnology and its controlling shareholder Hanma Investment Group, a  major industrial hemp-planter and processor, have agreed a cooperation  agreement for the JV, Shunho said in a statement. 

Luxin will  contribute CNY20 million (USD3 million) in cash and hold a 65 percent  stake in the unit, while Hansu will invest CNY10.8 million in  trademark-exclusive rights, proprietary technologies and equipment, and  hold the remaining 35 percent, according to the agreement.

The proposed JV  will use the basic materials extracted from industrial hemp leaves to  produce solids which don't combust under heat, liquid electronic  atomizers and buccal tablets, as well as liquid fragrances. 

Hansu engages in  scientific research on plants and sells industrial hemp products. It has  obtained an industrial hemp planting and processing license from  authorities in the Yunnan provincial capital of Kunming to legally sell  basic materials extracted from the crop.

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Keywords: Electronic Cigarettes , Derivatives Products , Industrial Hemp , Hemp Processing , R&D , Shunho Stock