big news! two "giant ships" will merge!
2024-09-03
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on the evening of september 2, china shipbuilding and china heavy industry both issued announcements on the suspension of trading due to the planning of major asset reorganization. china shipbuilding and china heavy industry are planning to merge china heavy industry by issuing a shares to all shareholders of china heavy industry in exchange for shares, so as to further focus on the country's major strategies and the main responsibilities and businesses of strengthening the military, accelerate the high-quality development of ship assembly business, standardize competition among peers, and improve the operating quality of listed companies.according to the 2024 semi-annual report just released by the two companies, the total assets of china shipbuilding and china heavy industry are 174.342 billion yuan and 201.974 billion yuan respectively. after the completion of this reorganization, the surviving listed company will become the world's largest flagship shipbuilding listed company with the largest asset scale, operating income scale and number of ship orders in hand.promoting the preservation and appreciation of state-owned assetssince the joint reorganization of the two shipbuilding companies (china state shipbuilding corporation and china shipbuilding industry corporation), china state shipbuilding industry corporation (hereinafter referred to as "china state shipbuilding corporation") has optimized the existing scientific research and production system and capacity layout, and integrated the scientific research and production resources of the two original shipbuilding groups. among them, ship assembly, as the core business of china state shipbuilding corporation's military and civilian shipbuilding business, is mainly undertaken by china state shipbuilding corporation and china heavy industry corporation, listed companies belonging to the two original groups.after years of development, china shipbuilding and china heavy industry have formed a full industrial chain production and manufacturing system covering shipbuilding, ship maintenance, electromechanical equipment and other ship assembly, and continue to launch world-leading military and civilian products for strategic tasks such as marine safety, deep-sea scientific research and resource development. against this background, china shipbuilding and china heavy industry have a high degree of business overlap in the field of ship assembly, which constitutes competition among peers.it is reported that this reorganization aims to complete the requirements of the sasac's "work plan for improving the quality of central enterprises' listed companies" on improving and strengthening the main responsibilities and businesses of state-owned enterprises, solve the problem of intra-industry competition between china shipbuilding and china heavy industry in the field of general assembly business, integrate and merge the scientific research and production systems and management systems, promote the professional, systematic and coordinated development of each member unit, implement the three-year action plan for deepening reform, and promote the preservation and appreciation of state-owned assets.seize industry opportunitiesbuild a world-class shipbuilding enterprisefrom the perspective of the industry, the shipbuilding industry is a very typical cyclical industry, which generally fluctuates in a ten-year cycle. after experiencing a recession in the first ten years, since 2021, the demand in the shipping market has grown steadily, the supply and demand pattern of the shipping industry has further improved and entered a recovery stage, and the prosperity has increased rapidly.in this cycle, china's shipyards' order-taking capacity is significantly stronger than the previous upward cycle, and my country's shipbuilding industry market share ranks first in the world. data shows that in the first half of 2024, my country's shipbuilding completion volume was 25.02 million deadweight tons, an increase of 18.4% year-on-year; new orders were 54.22 million deadweight tons, a year-on-year increase of 43.9%; as of the end of june 2024, the backlog of orders was 171.55 million deadweight tons, a year-on-year increase of 38.6%. my country's three major shipbuilding indicators accounted for 55.0%, 74.7% and 58.9% of the global total in terms of deadweight tons, and the shipbuilding market has further concentrated in china."and the difference between this cycle and the previous one is that the threshold for capacity expansion has increased. the main new orders are for large ships, lng and other high-value-added ships, which have high requirements for cost control and technological advantages," said an industry insider.in the first half of this year, the performance of the two companies increased significantly. according to the company's semi-annual report, china shipbuilding achieved operating income of 36.017 billion yuan in the first half of the year, a year-on-year increase of 17.99%, and net profit attributable to shareholders of listed companies of 1.412 billion yuan, a year-on-year increase of 155.31%; china heavy industry achieved total operating income of 22.102 billion yuan in the first half of the year, a year-on-year increase of 31.05%; net profit attributable to the parent company was 532 million yuan, a year-on-year increase of 177.13%.this reorganization will integrate the advantageous scientific research and production resources and supply chain resources of china shipbuilding and china heavy industry, promote the deep integration and upgrading of advanced technologies in shipbuilding and repair, and promote the deepening of reforms of china shipbuilding, china heavy industry and their subsidiaries through market-oriented means, improve the governance structure and governance capabilities, realize the integrated development of industrial operations and capital operations, promote each other, give play to synergy effects, and achieve complementary advantages.after the completion of this reorganization, the surviving listed company will become the world's largest flagship shipbuilding listed company leading the world in asset scale, operating income scale and number of ship orders on hand. in the future, it will seize industry opportunities, enhance its global industry influence, and continue to lead the development of the global shipbuilding industry by relying on its strong scientific research and innovation capabilities, advanced management level, exquisite manufacturing technology, rich product structure and production lines, thus laying a solid foundation for china shipbuilding group to become a world-class shipbuilding group and a leader in the global shipbuilding industry.supervision will continue to deepen reformscreate a favorable environment for corporate mergers and acquisitionsin addition, since last year, the market-oriented reform of mergers and acquisitions and restructuring has been deepened, and a series of reform measures have been introduced, such as the introduction of rules for the restructuring of targeted convertible bonds, the extension of the validity period of financial information, and the clear proposal to establish and improve a "green channel" for mergers and acquisitions and restructuring of technology-based companies that have broken through key core technologies, appropriately increase the inclusiveness of restructuring valuations, and optimize and improve the "small and fast" review mechanism for mergers and acquisitions and restructuring, etc., creating a good environment for mergers and acquisitions and restructuring.the new "national nine articles" proposes to "strengthen the reform of mergers and acquisitions and take multiple measures to activate the merger and acquisition market", "encourage listed companies to focus on their main businesses and use mergers and acquisitions, equity incentives and other methods to improve the quality of development", and "support mergers and acquisitions between listed companies". the merger of china shipbuilding and china heavy industry is also a positive response to the call of the new "national nine articles".in march, the csrc issued the opinions on strengthening supervision of listed companies (trial implementation), which proposed supporting listed companies to enhance investment value through mergers and acquisitions. multiple measures will be taken to activate the merger and acquisition market, and listed companies will be encouraged to use a combination of tools such as shares, cash, and directional convertible bonds to implement mergers and acquisitions and inject high-quality assets. all parties to the transaction will be guided to reasonably determine the transaction price based on market-based consultation. mergers and acquisitions between listed companies will be supported. the "small and fast" review mechanism for restructuring will be optimized, and research will be conducted on the rapid review of restructuring of high-quality large-cap companies.in june, the china securities regulatory commission issued the "eight measures on deepening the reform of the science and technology innovation board to serve technological innovation and the development of new productivity", proposing to support mergers and acquisitions with greater strength. support the science and technology innovation board listed companies to carry out mergers and acquisitions of upstream and downstream of the industrial chain to enhance industrial synergy. appropriately increase the valuation inclusiveness of mergers and acquisitions of science and technology innovation board listed companies, support science and technology innovation board listed companies to focus on enhancing sustainable operating capabilities and acquire high-quality unprofitable "hard technology" companies. enrich payment tools, encourage the comprehensive use of shares, cash, directional convertible bonds and other methods to implement mergers and acquisitions, and conduct research on installment payment of share consideration. support science and technology innovation board listed companies to focus on improving and strengthening their main business and carry out absorption mergers.according to the reporter, in the next step, the csrc will further deepen the reform of mergers and acquisitions and restructuring to stimulate market vitality; encourage listed companies to comprehensively use tools such as shares, cash, and targeted convertible bonds to implement mergers and acquisitions and restructuring, inject high-quality assets, and enhance the company's investment value.image | zcool helo
produced by | zhou wenrui
review | su shiyu
editor | shangguan monroe
final review | zhao xueyi
