After the resumption of trading on April 28, Luyang Energy-Saving Materials Co.Ltd(002088) shares met the daily limit for two consecutive days. On the 29th, more than 100000 hands were closed on the daily limit board, and the closing price was 15.85 yuan. All this stems from the company’s announcement on April 26 that the controlling shareholder qinai Asia Pacific plans to make a partial tender offer to acquire the company’s shares.
The subsequent tender offer report shows that qinai Asia Pacific plans to make a partial tender offer of 126 million shares at RMB 21.73, with a cost of RMB 2.735 billion. In the 30 trading days before the suggestive announcement of tender offer, the arithmetic mean of the daily weighted average price of Luyang Energy-Saving Materials Co.Ltd(002088) shares (keep two decimal places and round up) was 15.5 yuan / share, with a premium of 40.19%. Based on the closing price on April 26, the premium is as high as 65.88%. In the volatile environment of the market, the selection of high premium offer shows that qinai continues to be optimistic about the Chinese business, which also attracts the hot praise of investors.
profit has been growing for seven consecutive years, ranking the leading in segmentation
Qinai Asia Pacific is a wholly-owned subsidiary of qinai United fiber. Qinai United fiber is a leading supplier of high-performance special fibers and inorganic materials in the world. Its products are widely used in the fields of automobile exhaust emission control, heat management, filtration, battery and fire prevention. Qinai Asia Pacific offered 126 million shares, accounting for about 24.86% of the total share capital of the company. As of April 27, qinai Asia Pacific held Luyang Energy-Saving Materials Co.Ltd(002088) 142 million shares, accounting for 28.14% of the total share capital. After the completion of this tender offer, qinai Asia Pacific holds up to Luyang Energy-Saving Materials Co.Ltd(002088) about 268 million shares, accounting for about 53% of the total share capital. In other words, if this agreement is reached, the total share capital of the company held by qinai Asia Pacific will nearly double.
So why do the controlling shareholders attach so much importance to Luyang shares? The connection between the two dates back to eight years ago.
In 2014, qinai Asia Pacific controlled Luyang Energy-Saving Materials Co.Ltd(002088) , and took over 678538 million shares from Nanma asset management, accounting for 29% of the total share capital, thus becoming the controlling shareholder of the company.
Since then, the company’s profits have been rising. Since 2015, Luyang Energy-Saving Materials Co.Ltd(002088) net profit attributable to parent company has been increasing for 7 consecutive years. In 2021, the company achieved an operating revenue of 3.164 billion yuan, a year-on-year increase of 36.04%; The net profit attributable to the parent company was 534 million yuan, a year-on-year increase of 44.27%.
In the first quarter of 2022, the operation of the company was still good, with an operating revenue of 653 million yuan, a year-on-year increase of 6.73%; The net profit attributable to the parent company was 122 million yuan, a year-on-year increase of 6.95%.
Luyang Energy-Saving Materials Co.Ltd(002088) located in Yiyuan County, Zibo, the main products are ceramic fiber and rock wool. The company has an annual production capacity of 480000 tons of ceramic fiber products, and has ceramic fiber production bases in Shandong, Inner Mongolia, Xinjiang and Guizhou. According to the data, the sales volume of ceramic fiber products of the company accounts for about 40% of the national market, and the market share of high-end fields such as petrochemical is more than 50%, which has become the absolute leader in this segment.
In terms of technology source, qinai United fiber is the second largest ceramic fiber manufacturer in the world. It authorizes Luyang Energy-Saving Materials Co.Ltd(002088) high-quality technology and products to provide solid support for the company to continuously improve technology, reduce costs and expand products.
For the purpose of this tender offer, qinai Asia Pacific also said that it plans to increase the proportion of shares in listed companies through this tender offer, further consolidate its control over listed companies and enhance the stability of the equity structure of listed companies. If the tender offer is successfully completed, qinai Asia Pacific will further support and promote the growth and business development of Luyang Energy-Saving Materials Co.Ltd(002088) with its own business experience and resource advantages.
qinai Asia Pacific promises to gradually integrate Chinese business into Luyang Energy-Saving Materials Co.Ltd(002088)
On April 27, qinai Asia Pacific also signed a memorandum of strategic cooperation with Nanma asset management. The two sides will work together to promote the overall development of the new material industry in Luyang Energy-Saving Materials Co.Ltd(002088) location. At the same time, such cooperation will also help Luyang Energy-Saving Materials Co.Ltd(002088) further improve its business structure. Qinai Asia Pacific is the controlling shareholder of the company, while Nanma asset management is the fourth largest shareholder and government representative of the company. The trust of both sides is very important.
According to the strategic memorandum, since qinai first invested in Luyang Energy-Saving Materials Co.Ltd(002088) in 2014, Luyang Energy-Saving Materials Co.Ltd(002088) has achieved substantial growth in all aspects including annual sales and annual net profit. This is the result of the joint efforts of qinai and Luyang Energy-Saving Materials Co.Ltd(002088) management. It is also inseparable from the support of Nanma town and Yiyuan County Government. Qinai also deeply understands that Nanma’s support is very important to the success of Luyang Energy-Saving Materials Co.Ltd(002088) .
Qinai Asia Pacific promises that it will not relocate the company from Yiyuan and increase its shareholding to more than 50%, which will give it the source power to continue to invest in the company (including high-tech investment). Qinai Asia Pacific has begun to formulate qinai – Luyang Energy-Saving Materials Co.Ltd(002088) ‘s five-year development plan, which is expected to increase fixed asset investment for the company to optimize industrial structure, tap production potential and steadily increase sales, mainly focusing on exhaust control, special fiber and industrial heat management. The company’s R & D and innovation platforms will be gradually integrated in China, and the company’s main R & D and innovation platforms will be built in China. It will bring new technology to support the upgrading of PCW alumina products at this stage.
Qinai Asia Pacific also said to maintain the stability of Luyang Energy-Saving Materials Co.Ltd(002088) current core management team and build the company into an innovative enterprise combining local wisdom and international vision.
Everbright Securities Company Limited(601788) issued the Research Report and believed that the energy-saving transformation of high-energy consumption industry is the general trend, and Luyang Energy-Saving Materials Co.Ltd(002088) has the leading technology and cost advantages in the industry. Therefore, the logic of “market share increase brought by the reform of supply side marketing system + the trend of energy conservation and carbon reduction to promote the expansion of market demand” will still be deduced. If the tender offer of the controlling shareholder is successful, the company’s business structure is expected to usher in a qualitative improvement, and the growth ceiling will continue to open.
