1. Event
Zinc shares announced on December 24 that China Metallurgical Group and the people's Government of Huludao City in Liaoning Province and Huludao State-owned Capital Investment and Operation Co., Ltd. have signed the "Agreement on Free transfer of State-owned Equity". China Metallurgical Group intends to transfer its 24% stake in Huludao Nonferrous to Huludao State-owned Capital Investment and Operation Co., Ltd.
two。 Our analysis and judgment
After the above-mentioned free transfer of state-owned shares is completed, the ownership structure of Huludao Nonferrous is as follows: 35% of Huludao Hongyue Group Co., Ltd., 31% of China Metallurgical Group, 24% of Huludao State-owned Capital Investment and Operation Co., Ltd., and 10% of Liaoning State-owned assets Management Co., Ltd.
China Metallurgical Group indirectly holds 23.59% of Huludao Zinc Industry Co., Ltd. (000751) through China Metallurgical Huludao Nonferrous Metals Group Co., Ltd. Huludao Hongyue Group will become the major shareholder of Huludao Nonferrous Metals Co., Ltd. and indirectly become the major shareholder of the zinc industry.
Huludao Hongyue Group was established in November 2000 after the acquisition of Huludao Bajiazi Mining Co., Ltd., with mining development as the leading industry, with a total mining capacity of 500000 tons and a selective processing capacity of 1600 tons per day. the main products are lead, zinc, copper, silver and sulfur concentrate. Previously, in December 2013, Hongyue Group, China Metallurgical Group and Liaoning State-owned assets Company conditionally transferred all the shares transferred by all shareholders of Huludao Nonferrous through capital increase in accordance with the proportion of 55:10:35. As a result, Hongyue Group holds 35 per cent of Huludao Nonferrous shares.
At present, zinc industry shares are mainly engaged in hot-dip galvanizing and zinc ingot production, which belongs to the field of non-ferrous metal smelting and processing. In 2014, the company achieved an operating income of 4.287 billion yuan, of which hot-dip galvanizing and zinc ingot production and sales accounted for more than 75% of the business income.
We believe that the background of state-owned assets is gradually withdrawn, and the private capital engaged in lead-zinc mines as the largest shareholder will enhance the actual control ability of Hongyue Group over the shares of the zinc industry, thus further improving the operating efficiency of the shares of the zinc industry. in particular, it is beneficial for Hongyue Group to provide supporting integration of upstream lead and zinc ore production for zinc industry joint-stock zinc smelting extension business.
In 2014 and the first three quarters of 2015, the operating income of zinc shares was 4.287 billion and 3.09 billion respectively, and the realized profit was 22 million and 22 million respectively. In the future, two major drivers will further improve the company's performance: first, Yuehong Group will further expand its shareholding and inject its lead and zinc mines into zinc shares, and second, due to the contraction of upstream production capacity of zinc mines and zinc products in 2016, the supply gap has further expanded, and prices have room to rise by more than 20%. Two factors will reduce the cost of raw materials and increase the price of finished goods on both sides, expand the profit opening and boost the company's performance.
3. Investment suggestion
After the equity adjustment, the major shareholders of zinc industry shares have changed from state-owned enterprises to private enterprises, and become one of the listed companies with the most thorough reform of state-owned enterprises. After considering the change of major shareholders, the expectation of improving the operating efficiency of the company, as well as the expectation of asset injection of major shareholders, the recommended rating is covered for the first time.
4. Risk hint
Zinc mine prices were lower than expected and major shareholders failed to take further consolidation measures.