Big Mac Anhui Conch Cement Company Limited(600585) (600585. SH) has shot again.
On December 21, China West Construction Group Co.Ltd(002302) (002302. SZ) released the announcement of the plan for non-public offering of shares in 2021. The announcement said that Anhui Conch Cement Company Limited(600585) plans to subscribe 251 million shares with its own capital of 1.76 billion yuan. After the completion of the transaction, Anhui Conch Cement Company Limited(600585) will hold China West Construction Group Co.Ltd(002302) 16.3% shares and become the second largest shareholder.
Anhui Conch Cement Company Limited(600585) also announced that China West Construction Group Co.Ltd(002302) is a leading enterprise in China’s commercial concrete industry. The two sides will further strengthen strategic cooperation in raw material supply and marketing, concrete business, gravel aggregate business, logistics transportation, industrial Internet and so on.
In recent years, in order to improve industrial concentration, the central and local governments have issued industrial policies for many times to encourage the cement industry to reduce excess capacity and cultivate large enterprises with international competitiveness through mergers and acquisitions. At present, large cement and concrete enterprises have begun to promote the coordinated development of the industrial chain. The “window period” of industry integration has come. Enterprise integration in the industry will become an important way to optimize the production capacity structure.
the “window period” of industry integration has reached
China West Construction Group Co.Ltd(002302) is a comprehensive service provider for building materials industry, focusing on ready mixed concrete and related businesses. According to the semi annual report data, in the first half of 2021, China West Construction Group Co.Ltd(002302) achieved an operating revenue of 12.374 billion yuan, a year-on-year increase of 28.86%; The net profit attributable to shareholders of listed companies was 364 million yuan, a year-on-year increase of 23.04%. It is worth noting that under the influence of the epidemic in 2020, China West Construction Group Co.Ltd(002302) business performance still maintained a contrarian rise. In 2020, the revenue was 23.42 billion yuan, a year-on-year increase of 2.3%, and the net profit attributable to the parent company was 780 million yuan, a year-on-year increase of 18.7%.
However, the ready mixed concrete industry where China West Construction Group Co.Ltd(002302) is located is facing problems such as serious overcapacity, low industry concentration, low supply quality and urgent optimization of supply structure, and the industry development model is also gradually changing. Large cement and concrete enterprises have begun to promote the coordinated development of the industrial chain and gradually start the “Trinity” development model of cement, aggregate and concrete.
China West Construction Group Co.Ltd(002302) said in the announcement that enterprise integration in the industry will become an important way to optimize the production capacity structure. Anhui Conch Cement Company Limited(600585) and the company are upstream and downstream of the industrial chain, and the business fit is high. After the introduction of Anhui Conch Cement Company Limited(600585) , the two sides will carry out all-round cooperation in raw material procurement, concrete business and gravel aggregate business, so as to reduce the company’s raw material procurement cost and increase the company’s profit.
Some people close to Anhui Conch Cement Company Limited(600585) told the 21st Century Business Herald that the “industry position” of Anhui Conch Cement Company Limited(600585) , especially the cost advantage of the Yangtze River Delta, has not been shaken by enterprises. Anhui Conch Cement Company Limited(600585) it has 300000-400000 ton special Wharfs in the eastern region, and a large clinker base is built in the limestone enrichment area along the Yangtze River, which solves the transportation problem at low cost, so that it can exclude its competitors from the Yangtze River Delta with strong market.
In terms of concrete business, as the commercial concrete is limited by the transportation radius and has strong regional characteristics, the two sides will strengthen the construction and acquisition of concrete mixing plants in the form of establishing joint ventures. In the next three years, the two sides will invest in concrete mixing plants in East China, South China, central and Western China and overseas.
In addition, Anhui Conch Cement Company Limited(600585) gives China West Construction Group Co.Ltd(002302) certain concessions in terms of procurement mode, sales price, settlement and payment method, loan credit, etc. At the same time, China West Construction Group Co.Ltd(002302) has a huge demand for sand and gravel aggregate, and the two sides can carry out cooperation in the supply and marketing of sand and gravel aggregate.
competition mode changed
In recent years, in order to improve industrial concentration, the central and local governments have issued industrial policies for many times to encourage the cement industry to reduce excess capacity and cultivate large enterprises with international competitiveness through mergers and acquisitions.
Li Chen, Deputy Secretary General of China Cement Association, said that it is expected that regional mergers and acquisitions and industry integration within large groups may set off a new climax, which also meets the local requirements for carbon peak. Some industry analysts told the 21st Century Business Herald that under the pressure of double carbon targets, this round of acquisitions and mergers and acquisitions this year will test the capital strength of enterprises.
On December 11, the business integration of cement sector under China Building Materials Group Co., Ltd. achieved phased results. Xinjiang Tianshan Cement Co.Ltd(000877) (000877. SZ) has become the world’s largest cement enterprise after the “snake swallowing elephant”, and its market value has also jumped to more than 100 billion yuan. According to China building materials, after the integration, xintianshan cement has a clinker production capacity of about 300 million tons, a commercial concrete production capacity of about 400 million cubic meters and an aggregate production capacity of about 150 million tons
The 21st Century Business Herald reporter found that recently, Anhui Conch Cement Company Limited(600585) has frequently made strategic investments in enterprises in the same industry in the capital market. On November 3, western cement was increased by Anhui Conch Cement Company Limited(600585) or its persons acting in concert. After the increase, Anhui Conch Cement Company Limited(600585) or its persons acting in concert increased their shareholding ratio from 24.97% to 25.02%.
Earlier on October 8, Jilin Yatai (Group) Co.Ltd(600881) (600881. SH) announced that from July 7 to October 8, Anhui Conch Cement Company Limited(600585) bought Jilin Yatai (Group) Co.Ltd(600881) 162 million shares by means of centralized bidding transaction, accounting for 5% of the number of issued shares of the company, touching the placard line. Conch group said that the purpose of increasing its holdings is mainly based on the recognition of Jilin Yatai (Group) Co.Ltd(600881) long-term investment value.
Some institutional investors believe that Anhui Conch Cement Company Limited(600585) has sufficient funds, which makes it have full confidence in further industrial chain expansion, extension and M & A, or bring unexpected performance in playing the role of industry integrator.
It is worth noting that Anhui Conch Cement Company Limited(600585) announced the acquisition of 100% equity of conch new energy in the early stage, with the transaction target price of 443 million yuan. Conch new energy’s main business is photovoltaic, wind power generation, energy storage system technology development and services. Anhui Conch Cement Company Limited(600585) the purpose of laying out a new energy track and using photovoltaic power generation instead of coal energy power generation to reduce costs is self-evident.
Overall, in the context of double carbon, the competition mode of cement industry is changing, and green and low-carbon, technology and industrial joint innovation will become the key to future development and competition.
(21st Century Business Herald)
