Business Diversification Of Advanced Material Technology Corporation

Public companies in China are normally the leaders in at least one niche market,by which they are known for or defined with. In addition to core business, a lot ofthem also invest substantially in other areas, especially after they get listed.Motivations for diversification and whether it adds value to the firm in aggregate arevery hot topics in management science and finance studies.Advanced Material Technology Corporation (AMT) is a public company listed inShenzhen Stock Exchange since2008. Its main products include polyester industrialyarn, digital painting materials and tire cord fabrics. However from2011, itsuccessively invested in unrelated areas such as lithium battery, gold mining and hotelindustry, which was an apparent shift from its past footprints.This thesis will use AMT as an example to discuss unrelated diversification fromthree aspects: motivations, how to diversify and market response. While most paststudies on this topic are empirical researches and try to find general rules orconclusions, this case study aims to provide a more detailed practical example toillustrate what have been tried to answer but always turn out to be inconclusivethrough empirical studies. Furthermore, it touches topics that are difficult to bediscussed in empirical researches. As it was originally designed, the case could beused as a teaching material in courses such as corporate finance, corporate strategyand so on.