Beijing zhongqihua Assets Appraisal Co., Ltd
about
Inquiry letter on Guangdong Mingzhu Group Co.Ltd(600382) major asset restructuring draft
Special verification opinions
Listed company management Department II of Shanghai Stock Exchange:
Beijing zhongqihua Asset Appraisal Co., Ltd. is entrusted by Guangdong Mingzhu Group Co.Ltd(600382) (hereinafter referred to as “Pearl Group”) to provide asset appraisal services on the sale and purchase of major assets of Pearl Group and related transactions. For this transaction, Beijing zhongqihua Assets Appraisal Co., Ltd. has issued the asset appraisal report on the market value of the overall operating assets and liabilities of Guangdong Dading Mining Co., Ltd. Guangdong Mingzhu Group Co.Ltd(600382) involved in the proposed sale and purchase of major assets on December 7, 2021 Appraisal report on the market value of all shareholders’ equity of Guangdong Mingzhu group urban operation and Development Co., Ltd. involved in the Guangdong Mingzhu Group Co.Ltd(600382) proposed sale of major assets.
On December 17, 2021, your department issued the inquiry letter on the draft of Guangdong Mingzhu Group Co.Ltd(600382) major asset restructuring (szgh [2021] No. 3000); The second inquiry letter on the draft of Guangdong Mingzhu Group Co.Ltd(600382) major asset restructuring was issued on December 22, 2021 (szgh [2021] No. 3012); On December 24, 2021, the third inquiry letter on the draft of Guangdong Mingzhu Group Co.Ltd(600382) major asset restructuring was issued (szgh [2021] No. 3022). Beijing zhongqihua Assets Appraisal Co., Ltd. has issued the following special verification opinions in accordance with the provisions of China’s current laws, regulations, rules and other normative documents and in accordance with the recognized business standards, ethics and diligence spirit of China’s assets appraisal industry: first inquiry: Question 7
7. About the evaluation method of the purchase object. The draft discloses that in this asset purchase, the appraisal values of Dading mining’s operating asset package using asset-based method and income method are 11.0841 million yuan and 160.14659 million yuan respectively, with huge differences in the appraisal results. The appraisal conclusion of income method is selected as the pricing basis for this transaction. The discount rate in the forecast period is 11.38%. The company is requested to make supplementary disclosure: (1) the reasons and rationality of the great difference between the two evaluation results. The rationality of selecting the evaluation results under the income method as the pricing basis this time, and further explain the rationality of the selection of relevant evaluation methods, evaluation assumptions, main parameters and other indicators in the case of great difference between the results of the two evaluation methods; (2) The conclusion of comparable transactions in the contract industry shows the rationality of the selection of main parameters when calculating the discount rate in the forecast period. Please supplement the sensitivity analysis on the impact of the discount rate on the valuation in the evaluation process. Please comment. (3) In combination with the answers to the above questions, explain the rationality of the valuation of this transaction. The financial advisor and appraiser are invited to express their opinions.
[reply]
(1) The reason and rationality of the great difference between the two evaluation results. This time, the evaluation results under the income method are selected as the rationality of the pricing basis, and further explain the rationality of the selection of relevant evaluation methods, evaluation assumptions, main parameters and other indicators under the condition of great difference between the results of the two evaluation methods;
A. The rationality of the huge difference between the two evaluation results
The great difference between the asset-based method and the income method is mainly due to the great difference between the two evaluation methods. Among them, the asset-based method is an evaluation idea to determine the value of the evaluation object on the basis of reasonable evaluation of various asset values and liabilities of the operating asset package, which is considered from the way of re acquisition of assets; The income method is an appraisal idea to determine the value of the appraisal object by discounting the expected income of the operating asset package. It is considered from the perspective of future profitability and considers the future income of the operating asset package.
The evaluation results of the two methods differ greatly and are reasonable.
B. The rationality of taking the evaluation results under the income method as the pricing basis
The appraisal result of the income method is selected as the appraisal conclusion this time. The specific reason is that the income method is a method to calculate the appraisal value based on the prediction of future income, which not only considers the impact of factors such as whether each sub item asset is reasonably and fully utilized in the enterprise and whether it has played its due contribution when combined, The impact of the enterprise’s industry competitiveness, customer resources, the company’s management level, human resources, factor synergy and other factors on the operating asset package is also considered. According to the purpose of this appraisal, the participants pay more attention to the future profitability of the operating asset package, and the income method is more suitable for the purpose of this appraisal. Therefore, the income method is selected to evaluate the results.
In conclusion, it is reasonable to select the appraisal results under the income method as the appraisal conclusion. C. Rationality analysis of the selection of evaluation methods, evaluation assumptions, main parameters and other indicators
a. Rationality analysis of evaluation method selection
The appraisal methods selected for this appraisal are asset-based method and income method. The reasons for choosing the evaluation method are as follows:
Due to the lack of similar or similar business asset packages with strong comparability in China’s capital market, the low disclosure of business asset package transaction information, and the lack or difficulty in obtaining similar business asset package transaction cases, the market method is not suitable for this appraisal.
Due to the operating asset package held by the property right unit, the historical data of relevant income can be obtained. In addition, the operating assets package includes the mining right of Dading Iron Mine, which has stable business area and customer base, sustainable operation ability and relatively stable profitability, and the future income can be reasonably predicted. Therefore, the income method is suitable for evaluation.
The ownership of the operating assets held by the property right holding unit is relatively clear, and the relevant materials are relatively complete. It can evaluate and estimate the value of various assets and liabilities by adopting appropriate methods. Therefore, it is suitable to use the asset-based method for evaluation.
The selection of appraisal methods is reasonable.
b. Rationality analysis of selection of evaluation assumptions
The assumptions adopted in the analysis and estimation of the assets appraisal report are as follows:
(a) It is assumed that the property right holder is based on the set resource reserves, production mode, production scale, product structure, investment and development technology level and operates continuously;
(b) It is assumed that the enterprise undertaking the operating asset package can obtain the qualification required for mining production and operation according to law, and the qualification period has no significant adverse impact on normal production and operation;
(c) It is assumed that all personnel of the property right holding unit are transferred to the enterprise undertaking the operating asset package, and there is no significant change in employee compensation;
(d) It is assumed that the enterprise can produce and operate according to the production and operation plan;
(e) Assuming that the mining license held by the property right unit expires on January 4, 2029, it can be extended until the processing and sales of solid waste raw materials are completed;
(f) Assuming that there is no significant change in the current relevant national laws, regulations and policies and the national macroeconomic situation, and there is no significant change in the political, economic and social environment of the region where the parties to this transaction are located; (g) It is assumed that the interest rate, exchange rate, tax benchmark, tax rate and policy collection fees related to the property right holding unit and each subsidiary will not change significantly after the appraisal base date, except for known matters;
(h) It is assumed that after the benchmark date, the management of the property right holding unit is responsible, stable and capable of taking its position;
(i) It is assumed that the company fully complies with all relevant laws and regulations;
(j) It is assumed that there are no force majeure and unforeseen factors that have a significant adverse impact on the property right holder after the benchmark date;
(k) It is assumed that the accounting policies adopted by the property right holder after the benchmark date are consistent with those adopted in the preparation of the asset appraisal report in important aspects;
(l) It is assumed that after the benchmark date, the business scope and mode of the property right holding unit are consistent with the current one on the basis of the existing management mode and management level;
(m) It is assumed that the cash inflow of the property right holding unit after the benchmark date is the average inflow and the cash outflow is the average outflow.
The appraisal is conducted under the above assumptions. There are no assumptions that have been known that the hypothetical conditions actually occur and the real situation that has occurred is opposite to the hypothetical conditions. The appraisal assumptions are reasonable.
c. Rationality of selection of main parameters and indicators
(a) Rationality analysis of production and sales volume
1. Analysis of production and sales of iron concentrate
According to the “annual report of reserves”, by the end of October 2020, the amount of iron ore resources retained in the mining license was 1967.947 million tons. After deducting the dynamic consumption from November 2020 to the end of September 2021, and deducting the reliability adjustment of inferred resources and design loss, the recoverable reserves on the appraisal base date were 12.5339 million tons, According to the “development and utilization plan”, the recoverable reserves of open-pit mining are 9.0663 million tons.
Through communication with the property right holder, with the increase of operation depth, the operation space is becoming smaller and smaller, the equipment is becoming more and more difficult to manipulate, the operation points are gradually reduced, and the mining capacity is declining. Due to the national environmental protection policy, the solid waste raw materials produced by mining and beneficiation can be used to process building stones, and the surrounding rock above the raw ore can be stripped and processed into building stones, After the stripping work is carried out to a certain extent, the mining operation space will gradually increase, the mining points will also increase, and the mining capacity will gradually increase. The annual output of ore will be determined according to the production and operation plan of the enterprise, as follows:
Unit: 10000 tons
October December 2021 2022 2023 2024 2025 2026 2027
72.00180. 00150.00140. 00150.00200. thirty-nine point two one
Annual sales volume of iron concentrate = annual output of ore × Iron geological grade × (1 – ore dilution rate) × Iron beneficiation recovery ÷ iron concentrate grade.
Take 2023 as an example:
Iron concentrate output 1 (iron ore) = 150.00 × 41.04% × (1-2.64%) × 90.79 %÷ 62.88%
= 865400 tons
According to the stripping and mining situation of the enterprise in recent years, the stripping ratio of the future year is determined to be 0.64 based on the average stripping ratio from 2018 to September 2021, and the waste rock generated from the selected raw ore is determined to be 16.27% based on the raw ore selection and coarse crushing and medium crushing waste volume over the years. Taking 2023 as an example, the annual formation of solid waste raw materials is 1204100 tons (= 150 tons) × (0.64+16.27%))。 According to the preliminary design of low-grade iron ore comprehensive utilization project of Guangdong Dading Mining Co., Ltd. (Guangdong Metallurgical architectural design and Research Institute Co., Ltd., September 2020), the mineral content in iron is 7.91%, the iron grade is 20.6%, the yield of specification gravel is 59.86%, the yield of 5-10mm stone meter is 12.89%, and the yield of 0-5mm stone powder is 19.34%. Then the annual output of medium iron ore is 9.52 (= 120.41 × 7.91%) 10000 tons, then the output of iron concentrate 2 (medium iron ore) = 9.52 × 20.60% × 90.79 %÷ 62.88%
= 28400 tons
Total output of iron concentrate = 86.54 + 2.84 = 893800 tons
According to the above analysis, it is calculated that the sales volume from October to December 2021 to February 2027 is 5.5486 million tons.
According to the recovery of iron ore from the processing of solid waste raw materials by the enterprise from 2020 to the benchmark date, it is estimated that the recoverable iron concentrate of solid waste raw materials produced by mining over the years of processing and treatment is 247800 tons. Ⅱ. Analysis on sales volume of sandstone minerals
According to the technical report on the surveying and mapping project of tailings pond and waste dump of Guangdong Dading Mining Co., Ltd. provided by the property right holder, 94.5888 million tons of solid waste raw materials produced by iron ore mining over the years can be used to process into building stones. According to the interview with the property right holder, the utilization rate of solid waste raw materials is 70%. According to the amount of waste rock produced by mining in historical years, it is estimated that subsequent mining can produce 7.4749 million tons of solid waste raw materials.
At present, the capacity of the stone and sand production line owned by the property right holder is 3.6 million tons / year. Due to the increasingly prominent contradiction between supply and demand of building stone resources, in order to meet the needs of the market, the production will be expanded in June 2022 and the new production line will be completed. It is estimated that the new capacity will be 3 million tons / year and the total capacity can reach 6.6 million tons / year.
According to the reserve report and mining operation plan provided by the enterprise, it is expected that the iron ore can be mined in February 2027. According to the estimation of waste rock generated by mining in historical years, the subsequent mining can produce 7.4749 million tons of solid waste raw materials. The solid waste raw materials generated by iron ore mining over the years can be used for processing into building stones, with a total of 102.0637 million tons. The utilization rate of solid waste raw materials is about 70%, and nearly 70 million tons of sand and gravel construction aggregate will be produced in the future. According to the production and operation plan of the enterprise, the total output of construction sand and gravel aggregate in the appraisal and prediction period is 68.5 million tons. It is estimated that 500000 tons can be produced and sold from October to December 2021, 3 million tons can be produced and sold in 2022, 5 million tons can be produced and sold every year from 2023 to 2035. It is estimated that the construction stone produced by mining will be processed and sold in 2035.
According to the above analysis, the sales volume of iron concentrate and sand and gravel in the forecast period is in line with the actual production and operation of the enterprise and is reasonable.
(b) Rationality analysis of sales price selection
Ⅰ. Analysis on rationality of sales price selection of iron concentrate
According to the guiding opinions on Determination of mining right evaluation parameters, it is suggested to use qualitative analysis method and quantitative analysis method to determine the market price of mineral products. On the basis of obtaining sufficient market price information, the time series smoothing method can be used to judge the market price of mineral products. Generally, the simple average or weighted moving average method of historical monitoring data is used for prediction. Generally, the product price for appraisal is determined based on the average price of several years before the benchmark date or regression analysis. Due to the short service life of the mine of the project, considering the market price fluctuation of the mineral product scheme, it is determined to adopt the first phase of two years before the benchmark date
