the first major asset restructuring of the Beijing stock exchange is coming!
On January 4, AVIC TEDA, a listed company on the Beijing stock exchange, announced that it planned to acquire 34% equity of Baotou Iron and steel group energy conservation and environmental protection technology industry Co., Ltd. (hereinafter referred to as “Baotou Iron and steel energy conservation”) for 468 million yuan. This transaction will meet the major asset restructuring standards stipulated in Article 12 of the reorganization management measures and constitute a major asset restructuring of the listed company.
It is worth mentioning that AVIC TEDA is participating in the energy-saving mixed transformation project of Baotou Steel.
As one of the first listed companies of the Beijing stock exchange, AVIC TEDA’s acquisition is the first major asset reorganization of the listed company of the Beijing stock exchange to participate in the mixed reform of state-owned enterprises and the first major asset reorganization of the Beijing stock exchange.
Affected by this news, on January 5, AVIC TEDA’s share price rose by the limit, closing at 7.48 yuan.
participate in mixed reform
Specifically, AVIC TEDA plans to subscribe for the newly increased registered capital of Baotou Steel energy conservation with RMB 208.53 million, and transfer the registered capital of the subject company of RMB 159.42 million held by China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) with RMB 259.3764 million.
Before this transaction, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) directly held 100% equity of Baotou Steel energy conservation. After the completion of this transaction, AVIC TEDA will directly hold 34% equity of Baotou Steel energy saving. The total price of 34% equity of Baotou Steel energy saving, the subject of this transaction, is 467.9064 million yuan.
It is reported that Baotou Steel’s main business of energy conservation includes energy conservation and environmental protection in the iron and steel industry, such as hazardous waste disposal, industrial water treatment, industrial waste gas treatment, environmental testing, energy conservation transformation, landscaping and industrial energy conservation consulting.
The listed company is a comprehensive service provider in the field of industrial flue gas treatment, which is committed to providing full life-cycle services for industrial flue gas treatment for non electric industries such as steel and coking.
AVIC TEDA said that the mixed reform is conducive to the complementary advantages and synergy between the company and Baotou Steel. By combining the technical advantages and resources accumulated in the development of its main business with the energy-saving development of Baotou Steel, the company provides support in engineering design, construction management and operation services, which helps to further improve the comprehensive energy-saving technology and market service capacity of Baotou Steel and improve its core competitiveness. Meanwhile, Baotou Iron and Steel Group has long-term demand for energy conservation and environmental protection. The establishment of energy conservation and environmental protection platform through this transaction can realize complementary advantages and promote common development.
On the other hand, AVIC TEDA said that the mixed reform is conducive to improving the company’s competitiveness and profitability. The company said that Baotou Iron and Steel Group is one of the company’s important customers. The company’s participation in the mixed reform project of large state-owned enterprises will help to expand its business scope, reduce the risk of being replaced or occupied by companies in the same industry, and improve the company’s market competitiveness and industry status. After the completion of this transaction, Baotou Iron and steel energy conservation provides the company with new business areas, which helps to improve the profitability of the company and enhance the anti risk ability of the company.
As of the benchmark date of April 30, 2021, based on the asset-based method, the appraisal value of Baotou Iron and steel energy conservation is 975081900 yuan, the added value is 344101100 yuan, and the added value rate is 54.53%; Based on the income method, the owner’s equity of Baotou Iron and steel energy conservation is 630980800 yuan, the assessed value is 97412530 yuan, the added value is 34314500 yuan, and the added value rate is 54.38%.
the “gold content” of net profit is not high
The announcement shows that from 2019 to 2020 and the first three quarters of 2021, Baotou Iron and steel energy conservation achieved operating revenue of RMB 550 million, RMB 657 million and RMB 804 million respectively, and net profit of RMB 38.9516 million, RMB 93.063 million and RMB 246 million respectively (Unaudited).
It can be seen that the net profit of the target company has increased very rapidly in recent years. In the first three quarters of 2021, the company’s revenue and net profit have significantly exceeded the annual data of the previous year.
Company announcement
However, at the same time, the amount of cash flow generated from the operating activities of the subject company continued to be negative, which were -2.4911 million yuan, – 3.219 million yuan and -38.0985 million yuan respectively during the above-mentioned period, with a cumulative amount of -43.7186 million yuan.
This means that the net profit “gold content” of Baotou Steel energy saving is not high, and it is not really making cash in operation.
In fact, the same situation exists in listed companies.
From 2018 to 2020, AVIC TEDA achieved operating revenue of 434.7 million yuan, 463.7 million yuan and 401 million yuan respectively, and net profit attributable to parent company was 38.94 million yuan, 29.12 million yuan and 29.2 million yuan respectively. In the same period, the cash flow generated from the operating activities of listed companies were -1.702 million yuan, – 70.84 million yuan and – 55.95 million yuan respectively.
It should be noted that this transaction is paid in cash and does not involve the issuance of shares.
As of September 30, 2021, the ending balance of cash and cash equivalents of the listed company was 62.87 million yuan, and the monetary capital in current assets was 67.37 million yuan, which was far from enough to pay for this transaction.
So where does the company’s capital come from?
(International Finance News)
