(Yicai Global) April 18 -- Shares in two more Chinese firms soared by the maximum allowed after releasing plans to conduct industrial hemp business as investors remain transfixed on the emerging sector.
Shenzhen-based Capstone Industrial [SHE:000038] closed 10 percent higher at CNY14.74 (USD2.20) after penning a cooperation framework agreement with Tenjove Newhemp Biotechnology for a CNY1 billion (USD149 million) joint venture to develop an industrial hemp industrial chain. The pair aim to use blockchain to boost transparency and prevent the illegal use of products.
Tenjove is an indirect wholly-owned subsidiary of US-listed Shineco. It has established a leading full-chain business in industrial hemp planting and processing, as well as cannabidiol active ingredient extraction.
Noposion Agrochemicals, another Shenzhen-based company [SHE:002215] rose 10 percent to close at CNY9.21 after investing CNY90 million (USD13.4 million) to obtain a 52.9 percent stake in fertilizer maker Jinxin Biotechnology.
Nopoison will act as the hemp business contractor for the target firm for three years. Jinxin Biotech has also ensured that it will obtain a license to plant more than 10,000 mu of hemp.
Industrial hemp has become an investment hotspot for China's stock market since this year. Many listed firms announced their market entry, inflating their share prices. One such stock is Shunho New Materials Technology [SHE:002565], which has swelled fivefold in the three months since announcing plans for growing the product.
Despite the craze in the capital market, China still imposes strict controls on the cultivation of industrial hemp and it has not approved the cultivation of any medical cannabis nor the launch of any medicine containing tetrahydrocannabinol and other active cannabinoids so far, the country's drug control committee said in a statement in March.
Editor: William Clegg