After two months, the specific plan for major asset replacement and issuing shares to purchase assets of guangdong songfa ceramics (603268.SH) has finally been finalized.

In this instance, guangdong songfa ceramics plans to replace its ceramic main business assets with the equity of hengli heavy industry group co., ltd. (hereinafter referred to as 'hengli heavy industry'), with the difference made up by issuing shares.

Since the initial announcement of the restructuring, guangdong songfa ceramics has seen a cumulative increase of more than 200%. Although it closed at a limit down of 48.08 yuan/share on December 2, this still represents an increase of 373% compared to the current acquisition plan's determined issue price of 10.16 yuan/share.

Hengli heavy industry, which specializes in ship manufacturing, has indeed experienced robust growth. Its revenue and net income attributable to shareholders for the first three quarters of 2024 were 3.306 billion yuan and 0.134 billion yuan, respectively, already surpassing last year's total performance.

It is worth mentioning that hengli heavy industry's core assets come from south korea's STX (Dalian) shipbuilding co., ltd., which had undergone bankruptcy restructuring and was acquired by hengli heavy industry in 2022.

For guangdong songfa ceramics, which is still hovering on the brink of delisted risk, hengli heavy industry is undoubtedly a 'lifeline.'

Whether this merger and acquisition can proceed is something the market is waiting to see.

According to the trade arrangement, guangdong songfa ceramics plans to exchange all of its assets for shares in hengli heavy industry, and the difference will be paid through private placement to the shareholders of hengli heavy industry.

This trade does not involve a change in the actual controller of guangdong songfa ceramics.

As the counterparty in the trade, Zhongkun Investment, Suzhou Hengneng, and Hengneng Investment are all controlled by the actual controller of guangdong songfa ceramics, Chen Jianhua and Fan Hongwei.

However, due to the significant difference between the assets being injected and exited, the controlling shareholder of guangdong songfa ceramics will change to Zhongkun Investment, which will hold a shareholding ratio of 39.86%.

This time, the intermediary institutions mainly used the asset-based approach to evaluate guangdong songfa ceramics and hengli heavy industry. The assessed value of all assets of guangdong songfa ceramics is 0.513 billion yuan, while the assessed value of hengli heavy industry is as high as 8.006 billion yuan.

The price difference between the two has reached 7.493 billion yuan.

According to the "Reorganization Management Measures," the price of shares issued by listed companies cannot be lower than 80% of the market price.

According to this calculation, the board of directors' resolution announcement for the acquisition case of guangdong songfa ceramics has trading averages of 80% for the 20 trading days, 60 trading days, and 120 trading days before the announcement at prices of 10.35 yuan/share, 10.16 yuan/share, and 10.67 yuan/share, respectively.

For this round, guangdong songfa ceramics has selected 10.16 yuan/share as the private placement price.

Choosing the lowest price among the three trading averages for private placement is indeed a practice of many companies.

For example, in January this year, cspc innovation pharmaceutical (300765.SZ) announced the acquisition of cspc pharma's Wei Sheng Pharmaceutical (Shijiazhuang) Co., Ltd. and other assets, also using the method of issuing shares to the counterparties. The selected private placement price of 20.91 yuan/share was also the lowest among the 20, 60, and 120 trading days' trading average before the benchmark date.

This means that the counterparties, including Zhongkun Investment, Suzhou Hengneng, Hengneng Investment, and Chen Jianhua, can exchange for guangdong songfa ceramics' stocks at a relatively low price.

This time, guangdong songfa ceramics plans to issue an additional 0.738 billion shares to the counterparties. If calculated based on guangdong songfa ceramics' closing price of 48.08 yuan/share on December 2 and this private placement price of 10.16 yuan/share, the shares of Zhongkun Investment, Suzhou Hengneng, Hengneng Investment, and Chen Jianhua would appreciate by 27.985 billion yuan.

This is obviously related to the excessive market increase following the initial announcement of the restructuring plan.

On October 1, guangdong songfa ceramics first disclosed the transaction plan and, after being suspended for 7 trading days, the stock price soared—over a total of 32 trading days from October 17 to November 29, the stock price skyrocketed from 15.79 yuan/share to 53.42 yuan/share, achieving a cumulative increase of 238.32%.

However, on the specific plan's implementation day, December 2nd, guangdong songfa ceramics experienced a limit-down.

Hengli Heavy Industry had plans to go public for a long time.

In August this year, foreign media reported that Hengli Heavy Industry would be listed in Hong Kong, but ultimately, Chen Jianhua and Fan Hongwei chose to integrate it into guangdong songfa ceramics.

As a shipbuilding company, Hengli Heavy Industry mainly focuses on the production of various ships such as bulk carriers, tankers, container ships, and gas carriers, with income showing a steady growth trend.

In 2022, 2023, and the first three quarters of 2024, Hengli Heavy Industry's revenue was 0.02 billion yuan, 0.663 billion yuan, and 3.306 billion yuan respectively, with net income during the same period of -0.026 billion yuan, 0.001 billion yuan, and 1.34 billion yuan.

The rapid growth of Hengli Heavy Industry's performance during the reporting period also began with an acquisition in 2022.

In July of that year, Hengli Heavy Industry invested 1.729 billion yuan to acquire a total of 13 companies under the name of the south korean STX (Dalian) Shipbuilding Co., Ltd., which had been idle for 10 years (collectively referred to as 'STX Dalian').

STX Dalian was once the largest foreign-funded shipyard in china, owning the largest single shipyard in northern china, but due to mismanagement, it began to incur losses in 2012 and entered bankruptcy liquidation in 2015. Since then, its production base has remained idle and has been auctioned multiple times, until it was bought by hengli heavy industry in 2022.

After the acquisition, hengli heavy industry carried out extensive renovations on the STX Dalian production base, initiating a large-scale shipbuilding operation, which has contributed to hengli heavy industry's current performance.

In 2023, hengli heavy industry's new orders reached 0.004 billion deadweight tons, ranking sixth in china and ninth globally.

With the revival of the shipbuilding industry, there are high expectations for hengli heavy industry's future performance growth.

Data from Clarkson and the china shipbuilding industry association shows that in 2023, the global shipbuilding completed volume, new orders volume, and new orders amount to 0.084 billion deadweight tons, 0.084 billion deadweight tons, and 214 million tons deadweight respectively, with year-on-year growth of 5.17%, 29.73%, and 17.61% respectively.

Clarksons estimates that from 2024 to 2034, the total global ship investment demand is expected to reach 2.3 trillion dollars, of which the demand for new shipbuilding investment is about 1.7 trillion dollars, indicating significant growth in the ship industry.

Against the backdrop of high prosperity in the industry, hengli heavy industry is not the only ship enterprise planning capital operations.

In September this year, china cssc (600150.SH) planned to absorb and merge china shipbuilding industry (601989.SH) to further integrate resources and leverage synergies.

Meanwhile, this acquisition may also be a "shell protection" move for guangdong songfa ceramics.

Guangdong songfa ceramics mainly engages in household ceramics, customized ceramics, and various other types of ceramics, but has been in a state of loss in recent years. The net losses attributable to the parent from 2021 to 2023 are 0.309 billion yuan, 0.171 billion yuan, and 1.17 billion yuan, respectively.

In 2022 and 2023, the revenue of guangdong songfa ceramics has been below 0.3 billion yuan for two consecutive accounting years.

According to the new delisting regulations, if the net income for the most recent accounting year is negative and the revenue is below 0.3 billion yuan, then the listed company will be subject to delisting risk warning.

If guangdong songfa ceramics' revenue in 2024 is below 0.3 billion yuan and it continues to incur losses, there is a possibility of facing delisting risk.

In the first three quarters of 2024, guangdong songfa ceramics' revenue and net income attributable to the parent are 0.181 billion yuan and -0.06 billion yuan, respectively.

However, if the integration with Hengli Heavy Industry goes smoothly, guangdong songfa ceramics is expected to break free from the state of past losses and move away from the edge of delisting risk.