Company announcement: double Star Group and its subsidiary Xingwei Korea Co., Ltd. and Jinhu Tire and Jinhu Tire creditors signed "share subscription Agreement" and "shareholder Agreement" on behalf of Korea Development Bank (KDB).
Xingwei Korea, a subsidiary of the double Star Group, will increase its capital to Jinhu Tire by about 646.3 billion won, subscribe for about 129 million common shares issued by Jinhu Tire at a price of 5000 won per share, and then hold a 45 per cent stake in Jinhu Tire and become its controlling shareholder.
Jinhu Tire is the second largest tire factory in South Korea, with global production capacity, strong R & D and supporting strength.
Jinhu Tire is the second largest tire manufacturer in Korea with a history of 58 years. It once ranked as the 10th largest tire company in the world. Its main products are PCR (light truck tyres and passenger tires). At present, Jinhu Tire has a global design capacity of about 60 million units, which are distributed in 8 tire production plants around the world, including 3 in South Korea, 3 in China, 1 in the United States and 1 in Vietnam, and has five R & D centers in the world. it is located in Korea (2), the United States, Germany and China, and is in a leading position in many technology fields. Provide original matching tires to major global automakers, including Hyundai, Kia, Mercedes-Benz, BMW, Volkswagen, General Motors, Chrysler, Gyibug, Dodge, Skoda, Renault and so on.
Promise to solve the competition in the same industry, double stars and Jinhu work together to create a new global tire giant.
In order to solve the potential peer competition between the subsidiary of the double Star Group and the company after the above-mentioned share delivery, the double Star Group undertakes to eliminate the inter-industry competition between the above-mentioned subsidiary of the double Star Group and the Company within no more than 5 years after the completion of the project delivery, including but not limited to asset injection. Double star's main advantage is all-steel tire, Jinhu advantage is semi-steel tire, if the acquisition is smooth, it will give full play to its complementary advantages and obvious synergy.
Profit forecast and investment rating: the Group's acquisition of Jinhu is progressing smoothly and is expected to become the largest shareholder of Jinhu Tire and a new domestic tycoon in the future. It is estimated that the EPS of 17-19 years will be 0.15,0.17,0.26 yuan respectively, corresponding to 40.7,36.1 and 22.9 times of PE in 17-19 years.
Risk tips: raw material prices fluctuate sharply, production capacity is not as expected, and acquisition integration is not as expected.