Financial Services Association, September 15 (Editor: Ga Chen) Recently, news of central enterprise restructuring has continued, and iconic cases of mergers, acquisitions, and restructuring have continued to emerge. Following the “China Shining Ship” brought about by China Shipbuilding's plan to absorb the merger of China Heavy Industries, “China Shenhu”, where China Minmetals plans to take ownership of Salt Lake shares, has followed one after another, marking a new climax in central enterprise restructuring. News broke that the controlling shareholder Weapons Equipment Group and the Electric Equipment Group are integrating the power transmission and transformation equipment business. Baobian Electric, a central enterprise reform concept stock, closed the market and recorded 7 boards in 10 days on Friday.

According to Wind statistics, excluding failed restructuring and sellers, there are 8 A-share central enterprise listed companies that have disclosed the progress of mergers, acquisitions and restructuring since the second half of the year, namely China Tungsten Hi-Tech, Shenyang Machine Tool, China Resources 39, Shanghai Electric Power, Bengang Steel, China Aviation Electric Measurement, Haohua Technology, and Zhongzhi Co., Ltd. The details are shown below:

Chinatungsten Hi-Tech announced on September 4 that the company plans to hold a shareholders' meeting on the afternoon of September 19 to review the company's proposals on purchasing 100% of the shares of Hunan Shizhuyuan Nonferrous Metals Co., Ltd. (“Kakizhuyuan Company”) and raising supporting capital. The company's first step in improving the layout of the tungsten industry chain is coming to an end. A number of industry insiders said that the acquisition by Chinatungsten Hi-Tech will further strengthen the company's “China's No. 1, World-Class” position, and at the same time enhance the company's profitability and bargaining power in the industry. According to the announcement related to Chinatungsten Hi-Tech, the company plans to purchase 100% of the shares of Shizhuyuan Company, which is held by Minmetals Tungsten Group Co., Ltd. and Hunan Woxi Mining Investment Co., Ltd. in total, by issuing shares and paying in cash. According to the relevant announcement, the overall price of Kakizhuyuan Company was 5.195 billion yuan. Currently, Kakizhuyuan Company produces more than 7,000 tons of tungsten concentrate per year, and is one of the largest tungsten concentrate production bases in the country. Tungsten concentrate production accounts for about 6% of the total domestic tungsten output and more than 4% of the world's total tungsten output.

According to the investor relations activity records disclosed by Shenyang Machine Tool on September 12, the company has been deeply involved in the machine tool industry for decades and has the most complete business layout and solid business development history in China. The company's asset restructuring plan is to issue shares to purchase 100% of Shenyang Zhongjie Aerospace Machine Tool Co., Ltd., 100% of Shenyang Machine Tool Sino-Czech Friendship Factory Co., Ltd., and 78.45% of Tianjin Tianduan Press Co., Ltd., and raise supporting capital. Shenyang Machine Tool issued an announcement on April 2. The 6th meeting of the 10th board of directors of the company and the 6th meeting of the 10th board of supervisors deliberated and approved the company's major asset restructuring draft and related proposals. In terms of raising supporting capital, Shenyang Machine Tool plans to raise supporting capital by issuing shares to no more than 35 specific targets by way of inquiry and issuance. The total amount of supporting capital raised will not exceed 1.7 billion yuan.

China Resources announced on August 4, 1999, that it will spend 6.2 billion yuan to acquire a controlling interest in Tianshili and include Tianshili, one of the leading innovative Chinese medicine companies, into the map. Many industry insiders believe that China Resources 39 and Tianshili are highly complementary. After successfully completing the merger and acquisition of Tianshili, China Resources 39's strength in innovative traditional Chinese medicine and cardiovascular traditional Chinese medicine was significantly strengthened. As one of the leading companies in innovative traditional Chinese medicine, Tianshili spent 1.315 billion yuan on R&D in 2023, accounting for 17.73% of the pharmaceutical industry's revenue in 2023, far higher than Eling Pharmaceutical's 0.935 billion yuan and Kangyuan Pharmaceutical's 0.772 billion yuan; by the end of 2023, it had 98 products under development, including 18 Class 1 innovative drugs. China Resources 39 said that this transaction will help China Resources 39 to speed up the pipeline of complementary innovative traditional Chinese medicine, continue to deepen the full process development system of traditional Chinese medicine, improve innovative drug research and development capabilities, and establish a leading advantage in the field of traditional Chinese medicine.

China Aviation Electric Measurement announced on August 6 that the company recently received approval from the China Securities Regulatory Commission to register the company to issue 2.086 billion shares to China Aviation Industry Group Co., Ltd. to purchase 100% of its shares in Chengdu Aircraft Industry (Group) Co., Ltd. According to the disclosure, the transaction amount reached 17.44 billion yuan. Industry insiders said that China Aviation Electric Power Measurement and restructuring matters have been officially approved by the Securities Regulatory Commission, indicating that this major asset restructuring is about to enter the substantive implementation stage. In this transaction, Aviation Industry Group plans to inject 100% of Chengfei Group's shares into China Aviation Electric Testing. This move is aimed at speeding up the securitization process of the Group's core assets.

According to the investor relations activity records disclosed by Bengang Steel Sheet on September 3, the company's asset replacement plan is that the assets to be placed in the company are 100% of the shares of Benxi Iron and Steel (Group) Mining Co., Ltd., and the assets to be placed are all assets and liabilities of the listed company other than reserved assets and liabilities. The difference between the assets to be placed and the assets to be placed is covered by one party in cash. On August 21, Shanghai Electric Power announced the progress of the purchase and settlement of major assets. The company reviewed and passed the relevant bill to acquire 66.40% of KE's shares in 2016. However, there is a difference between KE's new multi-year electricity price mechanism (MYT) review results and the delivery prerequisites agreed in the “Share Sale Agreement”, and the company is currently in negotiations with the counterparty based on the new MYT. Notably, there is still a risk that this transaction may affect the profitability of the underlying company due to changes in electricity prices, and may even lead to the termination of the transaction.