China Zhongwang intends to spin off its aluminum extrusion business in A-share backdoor listing

China's aluminum giant - China Zhongwang Holdings intends to spin off its core business The aluminum extrusion business is listed on the A-share backdoor, Zhongfangfang, and the underlying assets are valued at 28.2 billion yuan. China Zhongwang stated that the spin-off not only adds a financing platform for the company, but also helps to release corporate value.

According to the announcement of China Fangfang Stock Co., Ltd., it intends to restructure its assets with Zhongwang Group through major asset replacements and the issuance of shares to purchase assets and raise matching funds. The latter eventually completed the listing on the backdoor. In this plan, the valuation of the underlying assets is higher than the current market value of China Zhongwang by nearly 60%, and this time it is a share swap. If the stock price of Zhongfang shares rises in the future, it means that the shareholders of China Zhongwang will be split. The benefit is even greater.

The China Zhongwang press release quoted the company’s president and executive director Lu Changqing as saying, “This spin-off is an important milestone in the development process of Zhongwang in China and is an important measure to release the intrinsic value of the company.”

He said that the new A share platform will give more investors an opportunity to invest in the leading aluminum extrusion companies in the world, so that the market can better understand and understand the company's intrinsic value, and the company adds an important financing platform. At the same time, under a clearer corporate structure, Hong Kong-listed companies will be more focused on their business priorities and advantages, which will be beneficial to the long-term development of the Group and increase the value of shareholders.

After splitting the aluminum extrusion business, China Zhongwang directly engaged in the aluminum rolling business of mechanical equipment, deep processing of aluminum materials, and upcoming production. China Zhongwang press release stated that in the future, through the platform of A-share listed companies, it will continue to consolidate its industrial aluminum extrusion business's leading position in the industry, and at the same time benefit from the rapid growth of deep processing business and investment in aluminum rolling business.

China Zhongwang is the world's second largest and Asia's largest industrial aluminum extrusion product R&D manufacturer. In addition, the company is also developing high value-added aluminum rolled steel projects. The first phase is two production lines. The annual design capacity is 1.8 million tons. The first production line is currently undergoing the final stage of equipment commissioning.

The specific plan for backdoor listing is: Zhongfang intends to replace 100% equity of Xinjiang Zhongfang with a 100% equity of assets to be placed into the Zhongzhong Group's 100% equity, and the difference is passed to the Zhongwang Group. 39.33 million shares were paid at a price of 7.12 yuan per share. At the same time, the company will also raise supporting funds from non-public issuance of shares of eight shareholders, such as 7.12 yuan/share to Ruizhi No.1, to no more than 5 billion yuan, which is intended to be used in an annual output of 600,000 tons of high-strength, large-section industrial aluminum extrusion products. , and all-aluminum special vehicle projects.

After the transaction is completed, the controlling shareholder of Zhongfang will be changed to Zhongwang, the controlling shareholder of Zhongwang Group. Zhongwang will be refined into a wholly-owned subsidiary of Zhongwang, and the actual controller of Zhongfang will be changed to Liu Zhongtian. In this transaction, the total value of assets and transaction amount to be purchased was RMB 61.244 billion, accounting for 168 times of the listed company's total assets of RMB 365 million as of the end of last year, which constituted a major asset reorganization and a backdoor listing.

Zhongfang Company has also signed a profit compensation agreement with Zhongwang. After the latter promised to complete the implementation of this major asset restructuring, the net profit forecast for Zhongwang Group in 2016, 2017 and 2018 will not be less than RMB 2.8 billion respectively. 100 million yuan and 4.2 billion yuan.

According to the announcement, through this transaction, China Fangban will set a weak profitability real estate business, and at the same time put into the industrial aluminum extrusion business with good industry prospects, outstanding competitive advantages and strong profitability, which will become the largest in China. Industrial aluminum extrusion product R&D manufacturers with market competitiveness and broad market prospects.

Zhongfang Co., Ltd. suspended its shares from October last year and closed at 7.63 yuan before suspending trading. The company's shares will continue to be suspended, and will fulfill its obligation of information disclosure in a timely manner after obtaining opinions from the Shanghai Stock Exchange. China Zhongwang closed at HK$4.08 in early trading, down 5.34%, and the market value of the company was HK$22.23 billion.