The reason for the suspension of reorganization was announced! CNBM Has New Integration Plan in 2 Years

2024-08-16 10:15:40

On August 10, Ningxia Building Materials announced that it would terminate the exchange of shares to absorb and merge China Construction Information and issue shares to no more than 35 specific investors, including China Building Materials, to raise matching funds. At the end of January this year, the Shanghai Stock Exchange issued an audit decision on terminating the absorption and merger of building materials in Ningxia and the sale of major assets and raising matching funds. However, Ningxia Building Materials failed to fully explain the basis for the absence of significant uncertainty in the collection of accounts receivable of China Construction Information and the related favorable impact of the transaction on the company.

On August 10, Ningxia Building Materials announced that it would terminate the exchange of shares to absorb and merge China Construction Information and issue shares to no more than 35 specific investors, including China Building Materials, to raise matching funds.

It is noteworthy that the absorption and merger of building materials in Ningxia is far from a simple reorganization, but also involves Tianshan shares, competition in the same industry and the long-standing problem of overcapacity in the cement industry. On August 13, Ningxia Building Materials told reporters that the controlling shareholders are determined to solve the competition in the same industry and will launch a new integration plan for basic building materials within two years.

China Building Materials is the actual controller of Ningxia Building Materials, Tianshan Shares and China Construction Information. The main business of the former two is cement,

2022, the road of equity change involving three listed companies officially began. On the whole, the whole transaction is divided into three parts.

Firstly , Ningxia Building Materials absorbed and merged China Construction Information by issuing shares to all shareholders of China Construction Information;

Secondly , Tianshan shares acquired the controlling rights of subsidiaries of cement and other related businesses held by Ningxia Building Materials and the trademarks and other assets involved in cement and other related businesses by means of cash capital increase, with a cash capital increase of 2.718 billion yuan. The deal also involved a share swap to change control of a cement company;

Thirdly , Ningxia Building Materials intends to issue shares to no more than 35 specific investors and raise matching funds, with a total amount of more than 5.

At the same time, the transaction also has set conditions, stock exchange merger and acquisition are preconditions for each other, if either of them fails to be implemented, neither of them will be implemented. Over

capacity has always been a problem in the cement industry. Since 2016, relevant departments have successively issued a number of measures to help the industry reduce production capacity, including reducing excess capacity through joint restructuring. Previously, many people in the industry told reporters that mergers and reorganizations and enhancing industry concentration are one of the important measures to solve overcapacity.

Under the urging and guidance of relevant departments, the cement industry has opened the curtain of restructuring, including the restructuring of Jidong Cement and Jinyu Group, and the merger of China Building Materials and Sinoma. In 2021, Tianshan shares, the "big family" of industry restructuring, also integrated Southern Cement , Southwest Cement , Zhonglian Cement and other companies. It will also host Northern Cement and " in 2022 and 2023. Why does the cement industry, which has been in the upsurge of restructuring, fail to restructure this time?

In fact, the "old problem" has not been solved

. "At that time, the reorganization transaction was mainly to solve the problem of competition between us and Tianshan shares. At present, the main reason for the termination of the transaction is the problem of accounts receivable involved in the merger of China Construction Information, which has not been sorted out clearly after such a long time. "On the afternoon of August 13th, Ningxia building materials told reporters.". At the end of January

this year, the Shanghai Stock Exchange issued an audit decision on terminating the absorption and merger of building materials in Ningxia and the sale of major assets and raising matching funds.

According to relevant documents, the Shanghai Stock Exchange focused on three major issues in the transaction.

Firstly , the reason why the transaction disposes the control right of cement business by transferring the control right of cement business rather than selling all the shares;

Secondly , the adequacy of the provision for bad debts of accounts receivable of China Construction Information, and whether there are significant uncertainties in the collection of accounts receivable;

Thirdly , the changes of the main financial indicators before and after the transaction of building materials in Ningxia, whether the transaction is conducive to improving the quality of listed companies and enhancing the sustainability of listed companies.

However, Ningxia Building Materials failed to fully explain the basis for the absence of significant uncertainty in the collection of accounts receivable of China Construction Information and the related favorable impact of the transaction on the company. From the perspective of business content, Ningxia Building Materials and China Construction Information belong to two different tracks, the former produces and sells cement, while the latter focuses on science and technology.

Data show that in 2023, the operating income of China Construction Information was 19.264 billion yuan, an increase of 2.93% over the same period last year; The net profit attributable to listed shareholders was 285 million yuan, an increase of 224. Despite the considerable profits, the accounts receivable of China Construction Information reached 7.755 billion yuan, accounting for 57.55% of the total assets, compared with 58 at the end of last year.

"Controlling shareholders are determined to solve the competition in the same industry, and we will postpone it for two years." There will be an integration plan for basic building materials in two years. Ningxia building materials told reporters. If the reorganization with China Construction Information and other companies can be successfully completed, according to the original plan, Ningxia Building Materials will be transformed into an enterprise-level ICT ecological service platform, whose main business includes ICT value-added distribution, digital services, intelligent logistics and so on.

Take Tianshan Stock as an example." After completing the reorganization and trusteeship of many companies, the performance of Tianshan shares has changed significantly. According to the data, Tianshan shares are expected to lose 2.9 billion yuan to 3.5 billion yuan in net profit in the first half of this year, but it will be profitable in the same period of 2023. 1

. Regarding the reasons for the performance changes, Tianshan shares said that the main reasons were the year-on-year decline in the price of raw materials, the year-on-year decline in the cost of cement clinker and commercial concrete, and the year-on-year decline in the cost of cement clinker and commercial concrete. However, due to the weak market demand and the sharp decline in the prices of cement and commercial concrete, the gross profit margin of cement and commercial concrete decreased year on year. On the morning of August

14, Tianshan shares told reporters that since the first half of this year, the national cement market prices have been running at a low level, and the overall trend has shown a trend of "low hovering, shock rebound". We believe that the current situation of overcapacity in the cement industry is still grim, and the price depends on the relationship between supply and demand, which requires the industry to take various measures to implement supply-side structural reform.

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Recently, due to the persistent cost pressure in the south, the price of concrete has risen slightly with the raw materials, but the growth of market demand is limited, and the overall quotation is still stable. From October 31 to November 6, the national concrete price index closed at 112.47 points, up 0.31% annually and down 10.11% year-on-year.