after the 100 billion level restructuring dust has settled, China building materials has made another big move
After hours on April 14, Ningxia Building Materials Group Co.Ltd(600449) announced that the controlling shareholder China building materials is planning major events related to the issuance of shares of the company, which may constitute a major asset restructuring of the company.
Ningxia Building Materials Group Co.Ltd(600449) said that because this major event is still in the planning stage and there is uncertainty, the trading of the company’s shares has been suspended since the opening of the market on April 15, and the suspension is expected to be no more than 10 trading days.
On the same day, Ningxia Building Materials Group Co.Ltd(600449) closed at 14.23 yuan / share, with the latest market value of 6.805 billion yuan.
several listed companies issued announcements
On the same day, Xinjiang Tianshan Cement Co.Ltd(000877) announced that the controlling shareholder China building materials was planning related matters involving the acquisition of the company’s assets, which is not expected to constitute a major asset restructuring of the company. The matter is currently in the initial negotiation and planning stage. The company has not signed any letter of intent or relevant transaction agreement on the matter, and has not determined the counterparty, the specific asset scope involved and the transaction consideration.
At the same time, China building materials announced in the Hong Kong stock exchange that its subsidiary Xinjiang Tianshan Cement Co.Ltd(000877) has announced that it is planning a restructuring, which, if implemented, will involve asset acquisition; The subsidiary Ningxia Building Materials Group Co.Ltd(600449) has announced that it is planning to restructure. If implemented, it will involve Ningxia Building Materials Group Co.Ltd(600449) issuing shares and may constitute a major asset restructuring of Ningxia Building Materials Group Co.Ltd(600449) .
These three announcements seem to have little information, but they may mean a big move of China’s building materials.
Xinjiang Tianshan Cement Co.Ltd(000877) , Ningxia Building Materials Group Co.Ltd(600449) and China building materials Hong Kong stock listed companies belong to China Building Materials Group, which is formed by the reorganization of China State Construction Engineering Corporation Limited(601668) materials group and China National Materials Group and directly managed by SASAC. At present, China building materials group controls 13 listed companies, including 2 overseas listed companies, and China Building Materials Group is the core listed company of the group.
As the world’s largest comprehensive building materials industry group, China Building Materials Group’s business covers cement, commercial concrete, gypsum board, glass fiber, wind power blades, cement glass engineering, etc. The cement business is the ballast stone of China Building Materials Group, but it has suffered from horizontal competition for a long time.
In terms of revenue composition, the revenue of Ningxia Building Materials Group Co.Ltd(600449) cement business accounted for 70.36% of the total revenue in 2021, the revenue of Xinjiang Tianshan Cement Co.Ltd(000877) cement business accounted for 66.98% of the total revenue, and the revenue of Gansu Qilianshan Cement Group Co.Ltd(600720) cement business, another listed company of the group, accounted for nearly 90%.
huge increase in shareholding has just been completed
In fact, the industry has long speculated about the reorganization of Ningxia Building Materials Group Co.Ltd(600449) and Gansu Qilianshan Cement Group Co.Ltd(600720) for a long time.
China building materials had previously put forward a plan to increase its holdings. It plans to spend 120 million yuan to 150 million yuan to increase its holdings of Gansu Qilianshan Cement Group Co.Ltd(600720) shares from March 18, and 70 million yuan to 100 million yuan to increase its holdings of Ningxia Building Materials Group Co.Ltd(600449) shares from March 21.
As of March 29, China building materials has completed the implementation of increasing its holdings in the two companies, with a cumulative increase of Ningxia Building Materials Group Co.Ltd(600449) 7061800 shares, accounting for 1.47% of the total share capital, with an increase of 963325 million yuan; Increase Gansu Qilianshan Cement Group Co.Ltd(600720) 1195 shares, accounting for 1.54% of the total share capital, with an increase of 121 million yuan. Both exceed the lower limit of the planned amount. CNBM’s shareholding in Ningxia Building Materials Group Co.Ltd(600449) increased from 47.56% to 49.03%, and its shareholding in Gansu Qilianshan Cement Group Co.Ltd(600720) increased from 13.24% to 14.93%.
Interestingly, CSCEC information, which focuses on information technology, also participated in the above reorganization. In the morning of April 15, CSCEC information released a suspension announcement that China Building Materials Group is planning major events related to the company’s major asset restructuring. CSCEC information landed on the new third board in November 2015. It is a leading enterprise level ICT resource integration service provider in China. The company has won Lianhua as the world’s excellent general distributor in 2021.
The reporter noted that China building materials pointed out in its 2021 annual report that the company will take business integration as an opportunity to further optimize resource allocation and build the company into an industrial platform focusing on three major businesses: basic building materials, new materials and engineering and technical services. Optimize and upgrade the basic building materials business, vigorously promote high-end, intelligent and green, and accelerate the development of “cement +” business.
There is a precedent for the cement business integration of China Construction Group. Not long ago, the dust of the 100 billion level reorganization of the group was settled. In August 2020, in order to solve the problem of horizontal competition, China Building Materials Group injected 100% equity of Zoomlion cement, 99.93% equity of Nanfang cement, 95.72% equity of Southwest cement and 100% equity of Sinoma cement into Xinjiang Tianshan Cement Co.Ltd(000877) . The transaction scale reached 98.1 billion yuan, the largest in the history of A-share issuance and purchase of assets.
In September 2021, the target enterprise was incorporated into the scope of Xinjiang Tianshan Cement Co.Ltd(000877) consolidated statements; In November of the same year, 7.3 billion new shares issued by Xinjiang Tianshan Cement Co.Ltd(000877) were listed on the Shenzhen Stock Exchange The market value of Xinjiang Tianshan Cement Co.Ltd(000877) has also soared from more than 20 billion to 100 billion.
cement industry has just passed the trough
As for the performance, there is not much bright color in Gansu Qilianshan Cement Group Co.Ltd(600720) , Ningxia Building Materials Group Co.Ltd(600449) or Xinjiang Tianshan Cement Co.Ltd(000877) .
On April 7, Gansu Qilianshan Cement Group Co.Ltd(600720) disclosed the performance forecast. It is estimated that the net profit attributable to the parent company in the first quarter of 2022 will decrease by 41 million yuan to 46 million yuan compared with the same period of the previous year, a year-on-year decrease of 87% to 99%. The main reason for the pre reduction of performance is that affected by the rise of raw coal purchase price, the product sales cost increased year-on-year, resulting in the decline of product gross profit; In addition, some areas where the company is located are affected by covid-19 epidemic, resulting in a year-on-year decrease in cement sales.
Gansu Qilianshan Cement Group Co.Ltd(600720) fell into the dilemma of declining profits in 2021. The company achieved a revenue of 7.673 billion yuan in 2021, a year-on-year decrease of 1.78%, and a net profit attributable to the parent company of 948 million yuan, a year-on-year decrease of 34.07%. In this regard, Gansu Qilianshan Cement Group Co.Ltd(600720) said that during the reporting period, the sales volume of main products decreased year-on-year, the price of raw and fuel materials rose sharply, and the operating cost increased.
Also affected by the rise in raw coal prices, the net profit attributable to parent company in Ningxia Building Materials Group Co.Ltd(600449) 2021 decreased by 16.96 percentage points over the previous year, reaching 801million yuan.
Xinjiang Tianshan Cement Co.Ltd(000877) over the same period, the revenue was RMB 169979 billion, with a year-on-year increase of 4.83%, the net profit attributable to the parent was RMB 12.53 billion, with a year-on-year decrease of 3.53%, and the net profit deducted was RMB 4.948 billion, with a year-on-year increase of 248.02% Xinjiang Tianshan Cement Co.Ltd(000877) in the annual report, it is mentioned that the net profit after deduction of the company in the last three fiscal years, whichever is lower, is negative, and the audit report of the latest year shows that there is uncertainty in the company’s ability to continue operating.
Tianfeng Securities Co.Ltd(601162) research report pointed out that in the first quarter or the low point of the cement industry, in the second quarter, with the year-on-year weakening of the impact of coal price and the opening of price rise, the performance of cement enterprises may improve quarter by quarter. Under the double carbon target, the backward production capacity of the industry will accelerate the exit, and the industry as a whole may develop in the trend of “volume reduction and price increase”, and the concentration will further improve.
