On January 5, AVIC TEDA (836263, BJ) received the inquiry letter issued by the Beijing stock exchange. The company was required to supplement the capital source and payment arrangement of the equity acquisition, the equity structure of the underlying assets, the financial situation of the underlying assets, etc.
On January 4, AVIC TEDA disclosed the major asset purchase plan. The company plans to subscribe for the newly increased registered capital 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) with RMB 209 million, and plans to transfer part of Baotou iron and steel energy conservation shares held by China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) (600111, SH; yesterday’s closing price of RMB 42.02). After the completion of this transaction, The company holds 34% shares of Baotou Steel energy saving.
the total purchase price is 468 million
According to the third quarterly report of AVIC TEDA in 2021, the company achieved a revenue of 300 million yuan in the first three quarters of 2021, a year-on-year increase of 46.88%, and the net profit attributable to the parent company was 11.1502 million yuan, a year-on-year decrease of 47.15%. It is worth noting that as of September 30, 2021, the company’s monetary capital totaled 67.3669 million yuan.
According to the major asset purchase plan previously disclosed by the company, the total price of this equity acquisition transaction is 468 million yuan. The first batch of subscription for fixed increase will be paid within 5 working days after the adoption of the general meeting of shareholders. The proportion of the first payment shall not be less than 50% of the subscription for fixed increase, and the rest shall be paid within 1 year after the signing of the agreement.
In this regard, the Beijing stock exchange requires the company to explain the cash source of installment payment and specific arrangements for fund-raising in combination with the current cash flow situation, available financing channels and credit lines; For example, through loan channels, explain the loan amount, interest rate, term, arrangement of mortgage and pledge, and subsequent repayment plan. At the same time, the company is also required to explain whether the remaining working capital is sufficient, whether it will cause a large financial burden on the company and whether it will have an adverse impact on subsequent operations.
According to the major asset purchase plan, AVIC TEDA said that after the completion of this transaction, the company will provide support in engineering design, construction management and operation services by combining the technical advantages and resources accumulated in the development of its main business with Baotou Iron and steel energy conservation, so as to realize complementary advantages and give play to synergy; Baotou Steel energy conservation has a long-term demand in 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. At present, AVIC TEDA’s main business is to provide comprehensive treatment services in the construction and operation of environmental protection projects for industrial flue gas treatment.
In this regard, the Beijing stock exchange requires listed companies to explain the specific embodiment of the synergy between Baotou Steel and energy conservation in terms of business, management, technology, customers and market, and supplement whether this transaction is conducive to enhancing the company’s sustainable operation ability.
it is required to explain the current valuation
According to the major asset purchase plan, the unaudited operating income of Baotou Steel Energy Conservation in 2019, 2020 and January September 2021 was RMB 550 million, RMB 657 million and RMB 804 million respectively, the net profit was RMB 38.9516 million, RMB 93.063 million and RMB 246 million respectively, and the net cash flow from operating activities was RMB -2.4911 million, – 3.219 million and -38.0985 million respectively.
Beijing stock exchange requires AVIC TEDA to explain the specific composition of energy-saving operating revenue of Baotou Steel, including business type, region, corresponding amount and proportion in operating revenue, and list the sales amount and related relationship of the top five customers; At the same time, it further explains the reasons and rationality of the large performance increase in combination with the energy-saving sales model and profit model of Baotou Steel; Combined with the industry situation, business characteristics and sales credit policies, this paper analyzes the reasons and rationality of the mismatch between the net cash flow generated from operating activities and the change range of operating revenue and net profit.
The asset appraisal of Baotou Steel energy conservation has also attracted the attention of Beijing stock exchange. According to the major asset purchase plan, according to the asset appraisal report issued by Beijing Tianjian Xingye Asset Appraisal Co., Ltd. with April 30, 2021 as the appraisal base date, the appraisal value of the asset based method is 975 million yuan, with a value-added rate of 54.53%; The appraisal value of income method is 974 million yuan, with a value-added rate of 54.38%. The company selects the result of asset-based method as the final appraisal result.
In this regard, the Beijing stock exchange requires the company to explain whether the transaction price is based on the above evaluation value. If so, it shall supplement the rationality of the evaluation value and the specific evaluation process. If not, it shall explain the follow-up audit evaluation; At the same time, in combination with the value basis and rationality of relevant evaluation parameters such as discount rate and the situation of comparable companies in the same industry, explain whether the current valuation is significantly higher than the average level of the same industry.
(source: Daily Economic News)
