China Baowu iron and Steel Group (hereinafter referred to as China Baowu) jointly reorganized the next city.
On April 24, Xinyu Iron and steel ( Xinyu Iron & Steel Co.Ltd(600782) . SH) announced that Jiangxi state owned capital operation holding group (hereinafter referred to as Jiangxi state control) had signed an agreement with China Baowu, and the former would transfer 51% equity of Xinyu Iron and Steel Group to China Baowu free of charge.
Xinyu Iron and Steel Group holds 44.81% of the equity of Xinyu Iron and steel and is the controlling shareholder of the listed company.
After the above equity transfer is completed, Jiangxi state control will still hold 49% of the equity of Xinyu Iron and Steel Group, and China Baowu will become the controlling shareholder of Xinyu Iron and steel group. The target value of this free transfer is 4.255 billion yuan.
China Baowu is currently the world’s largest iron and steel company, while Xinyu Iron and Steel Group is the largest state-owned iron and steel enterprise in Jiangxi Provincep align=”center”>
According to the statistics of the world iron and Steel Association, China Baowu’s crude steel output reached 115 million tons in 2020, ranking first. Xinyu Iron and steel group ranks 46th in the world with a crude steel output of 9.89 million tons.
Xinyu Iron and steel group was founded in 1958. Its business covers steel smelting and processing, trade logistics, financial investment and other sectors.
In 2020, Xinyu Iron and steel group had a revenue of 79.8 billion yuan and a net profit of 2.7 billion yuan. In the first half of 2021, the company had a revenue of 57.3 billion yuan and a net profit of 1.4 billion yuan.
Since 2019, China Baowu has successively reorganized many large iron and steel companies, such as Maanshan Iron and Steel Group, TISCO group, Chongqing Iron & Steel Company Limited(601005) and Kunming Iron and steel holding. The four companies are the largest iron and steel enterprises in Anhui Province, Shanxi Province, Chongqing city and Yunnan Province. China Baowu also hosted Sinosteel group, which is also a central enterprise, in 2020.
In 2020, China Baowu’s revenue was 673.7 billion yuan and its net profit was 25 billion yuan. In the first three quarters of last year, China Baowu had a revenue of 769.5 billion yuan and a net profit of 21.4 billion yuan.
In 2017, China Baowu put forward a capacity expansion plan called “100 million tons of Baowu”, which plans to increase its capacity to 80-100 million tons by 2021.
This is consistent with the government’s plan to improve the concentration of the steel industry. The State Council has proposed that by 2020, China should form 1-2 80 million ton super large iron and steel groups.
China Baowu official wechat disclosed this month that after achieving the goal of “100 million tons of Baowu”, the company will continue to promote joint restructuring, strive to reach 200 million tons of crude steel by 2025 and achieve a global market share of 15% by 2035.
In an interview with the media in early 2020, Chen Derong, chairman of China Baowu, mentioned that even if China Baowu achieves 100 million tons of steel production capacity, it only accounts for 5% of the global market. As a truly mature industry, the market share of leading enterprises should at least reach more than 10% or even more than 20%.
“Although the steel industry is an ancient industry, the market structure of the whole industry is far from mature, so there is still a great opportunity for China Baowu.” Chen Derong said.
