a-share mergers and acquisitions surge: multiple orders worth hundreds of billions of central state-owned enterprises emerge, and "hard technology" mergers and acquisitions are full of vitality
2024-09-17
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after the new "nine national policies" and "eight science and technology innovation board policies" clearly and strongly supported mergers and acquisitions and restructuring, the mergers and acquisitions and restructuring market continued to heat up this year, with landmark cases constantly emerging, concentrated in the three major aspects of industrial mergers and acquisitions, technology mergers and acquisitions, and mergers and acquisitions of central state-owned enterprises, indicating that the a-share market may have entered a new round of mergers and acquisitions and restructuring cycle.
especially since august, the a-share m&a market has been bursting with vitality, with new m&a plans continuously "flooding the screen". the "giants" born from the mergers and reorganizations of many large-cap listed companies of central state-owned enterprises have ignited the market's imagination about their valuations.
china salt lake co., ltd. (000792.sz) will reorganize with china's largest metal mining group, china minmetals group. the china salt lake group is about to be launched, and this reorganization is expected to solve historical problems. in the securities industry, guotai junan securities (601211.sh) and haitong securities (600837.sh) are planning a merger, and the market is optimistic about the emergence of a "chinese version of goldman sachs". in the power industry, baobian electric (600550.sz), a subsidiary of china north industries group corporation, announced that its controlling shareholder had initiated business integration, which ignited capital sentiment and the company's stock price has risen by more than 90% in total.
mergers and acquisitions are an indispensable and important part of the development of the capital market. they are also an important way to achieve industrial integration and transformation and upgrading, optimize resource allocation, and help listed companies achieve high-quality development. especially for technology-based companies, mergers and acquisitions are one of the important means to achieve stronger competitiveness. with the progress of the implementation of the merger and acquisition plans that have been released, and the new merger and acquisition and restructuring plans that may be released in the future, the new merger and acquisition and restructuring cycle is expected to become the biggest highlight of the a-share market.
central soes' m&a and restructuring activities increased
the frequent policy support and greater support for mergers and acquisitions are the main driving force behind the active a-share merger and acquisition market this year. after february, the china securities regulatory commission and the state council frequently mentioned supporting mergers and acquisitions, including studying the implementation of "fast review" for the reorganization of large-cap companies and promoting the absorption and merger of listed companies with high-quality leading companies as the "main force". among them, after the release of the new "nine national regulations", the china securities regulatory commission further optimized the policy environment and took multiple measures to stimulate the vitality of the merger and acquisition market.
according to wind data and the analysis of the first financial reporter, since 2024, there have been more than 150 mergers and acquisitions or merger and reorganization plans in the a-share market, which has exceeded the level of the whole year of 2023 (about 130). since august, the m&a market has accelerated. by september, 8 major asset reorganization plans were released, involving many leading central state-owned enterprises with a market value of hundreds of billions of yuan, bringing the market the expectation of the landing of "world-class salt lake industrial base", "chinese version of goldman sachs" and "chinese magic ship".
on september 8, salt lake co., ltd. announced that the company's actual controller, the state-owned assets supervision and administration commission of the qinghai provincial government, the controlling shareholder qinghai state investment and china minmetals plan to jointly establish china salt lake group. if the transaction is completed, the controlling shareholder of salt lake co., ltd. will be changed from qinghai state investment to china salt lake group, and the actual controller will be changed from the state-owned assets supervision and administration commission of the qinghai provincial government to china minmetals.
on september 5, the announcement of the largest "a+h" merger of listed securities firms in the history of a-shares "swept" the circle of friends of financial people. guotai junan securities and haitong securities, the leaders of the hundreds of billions of securities industry, plan to plan major asset reorganizations, and the "super aircraft carrier" of the securities industry is about to emerge; on september 2, china shipbuilding (600150.sh) and china heavy industry (601989.sh) both issued announcements stating that china shipbuilding intends to absorb and merge china heavy industry by issuing a-shares to all shareholders of china heavy industry. both companies are large shipbuilding companies with a market value of more than 100 billion yuan, and the actual controllers are the state-owned assets supervision and administration commission of the state council. this move will 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 peer competition, and improve the operating quality of listed companies. as of the latest closing date, the total market value of china shipbuilding and china heavy industry reached 156.1 billion yuan and 113.6 billion yuan respectively.
“hard technology” gradually becomes the mainstream field of mergers and acquisitions
the merger and reorganization of large central state-owned enterprises is to focus on the development of the main business, integrate resources, achieve quality and efficiency improvement, play an industry-leading role, and promote the further high-quality development of listed companies. in the field of "hard technology", mergers and acquisitions are expected to strengthen the cultivation of advanced science and technology. the acquirer can expand the scale of business, increase market share, and avoid inefficient competition by purchasing assets or equity, especially to promote my country's accelerated breakthroughs in key bottleneck technologies in strategic emerging fields such as integrated circuits, biomedicine, and high-end equipment manufacturing.
the "eight articles on the science and technology innovation board" released this year clearly proposed to support science and technology innovation board listed companies in conducting mergers and acquisitions of upstream and downstream of the industrial chain to enhance industrial synergy effects; appropriately increase the valuation inclusiveness of mergers and acquisitions and restructuring of science and technology innovation board listed companies, and support science and technology innovation board listed companies to focus on enhancing their sustainable operating capabilities and acquire high-quality unprofitable "hard technology" companies.
since the policy was released, as of the latest closing date, nearly 20 companies listed on the science and technology innovation board have released industrial merger and acquisition plans, involving listed companies such as xinlian integration (688469.sh), puyuan precision (688337.sh), aidi pharmaceutical (688488.sh), sanyou medical (688085.sh), huitai medical (688617.3sh), and guodun quantum (688027.sh). among them, the three plans of xinlian integration, fuchuang precision (688409.sh), and xidiwei (688173.sh) are major asset reorganizations. there are also plans for a number of listed companies to acquire unprofitable assets.
in terms of integrated circuits, xinlian integrated circuit, a wafer foundry company that went public last year, plans to acquire the remaining 72.33% equity of its holding subsidiary xinlian yuezhou integrated circuit manufacturing (shaoxing) co., ltd. (hereinafter referred to as "xinlian yuezhou"), with a corresponding asset transaction price of 5.897 billion yuan. after the transaction is completed, the listed company's shareholding in xinlian yuezhou will increase from 27.67% to 100%. the interim report shows that xinlian integrated circuit's main business involves seven product lines, and automotive-grade semiconductors contribute nearly 50% of its operating income. xinlian yuezhou, which the company intends to acquire this time, is mainly engaged in the production of third-generation semiconductors, and the wafer manufacturing capacity of both parties is complementary. this acquisition of a loss-making company reflects the orientation of the "eight articles of the science and technology innovation board" to improve the valuation inclusiveness of mergers and acquisitions and restructuring.
after the analog chip company nanochip (688052.sh) terminated its control over quantum microelectronics co., ltd. (originally planned to be listed independently), the listed company announced that it plans to acquire a total of 79.31% of the shares of shanghai magnetic microelectronics in cash. the total purchase price is 793 million yuan. if the transaction is completed, shanghai magnetic microelectronics will become a wholly-owned subsidiary of nanochip.
"the global semiconductor industry has formed a leading structure. the top manufacturers have continuously improved their product structure and increased their market share through mergers and acquisitions during their development. there are often two approaches to mergers and acquisitions in the technology field. one is to acquire and integrate target assets that are closely related to the company's main business, directly buy the product line and enhance competitiveness; the other is to acquire upstream and downstream links in the industrial chain, enhance supply chain capabilities, and develop acquired assets into new growth points through strong management capabilities." an investment banker in east china told reporters, "in addition to policy support, the cooling of the ipo market is also one of the reasons for the increased activity in mergers and acquisitions in the technology field."
after the release of the new "nine national regulations", the shanghai and shenzhen stock exchanges have raised the listing standards. the number of new stocks so far this year is 64. in comparison, 264 new stocks were listed in the first nine months of last year and 313 new stocks were issued throughout the year. in the past, ipo was the main way for investors in technology companies to exit, and unprofitable companies could also be listed on the science and technology innovation board. after the ipo was tightened, the certainty of some independent listings decreased, and companies seeking to be acquired became the first choice for shareholders.
(this article comes from china business network)
