The 21st Century Economic Reporter Zhao Yunfan reports from Shanghai
In the middle of May, Shanghai Electromechanical (600835. SH) held an online briefing to explain and explain the acquisition of Shanghai Jiyou Mingyu Machinery Technology Co., Ltd. (hereinafter referred to as "Shanghai Jiyou") previously disclosed by the company, including some "disputes" on the transaction in the market.
Previously, Shanghai Electromechanical announced that the company planned to spend 5.3184 billion yuan to purchase 100% of the equity of Shanghai Jiyou from Shanghai Electric (601727.SH), the company's controlling shareholder, and other related parties, Electric Hong Kong and Electric Group Hong Kong.
The 21st Century Business Herald reporter learned that Liu Ping, the chairman of Shanghai Electromechanical Group, Zhuang Hua, the general manager, Bao Ye, the deputy general manager of Shanghai Jiyou, and other responsible persons responded to a number of market queries about the acquisition plan, including the reasons for the decline of the profits of the acquired enterprises in the current period, the intention of using all cash acquisition, and even the query that connected transactions were "used as cash machines by major shareholders".
The relevant responsible person of the company said that the acquisition plan was in line with the starting point of Shanghai Electromechanical Co., Ltd. to find the second main business. The business advantages of Shanghai Jiyou are also expected to help Shanghai Mechatronics set foot in aerospace, automotive, high-end equipment, robots and other fields.
Create the second main business of mutual collaboration
According to the public information, Shanghai Electromechanical enjoys the famous elevator brand of "Shanghai Mitsubishi Elevator" and focuses on it. Before the completion of the merger and acquisition of Jiyou, most of the company's consolidated statement business income came from Mitsubishi Elevator related businesses.
According to Zhuang Hua, general manager of Shanghai Electromechanical, with the adjustment of the domestic real estate industry, the elevator business has entered the era of stock and post service. In order to promote the further development of the company, Shanghai Mechatronics has continuously explored the possibility of creating the second main business of the company for many years.
“ We have positioned the second main business of electromechanical shares as an industrial platform for basic industrial parts and specialized new industries. Originally, Shanghai Electromechanical has a part of the foundation. After the completion of M&A, Jiyou can give full play to the advantages of key components of industrial infrastructure on the listed platform, bring the second growth curve to the listed company, and build the development pattern of the company's elevator business and industrial infrastructure driven by two wheels 。 "Zhuang Hua said in an interview.
Zhuang Hua also pointed out that Shanghai Mechatronics, which will complete the merger in the future, is expected to benchmark Japan NACHI in structure.
Data shows that NACHI, founded in 1928, is one of the world's leading suppliers of comprehensive mechanical solutions. Its main business focuses on precision machinery, tools, bearings, hydraulic press and other parts, automation equipment industrial robot module, body host and other businesses.
The main business of Shanghai Jiyou includes several important industrial machine tools, such as blades, bearings, cutters, industrial and automotive fasteners, and shareholding platform companies of cutting-edge manufacturing parts enterprises. Its business involves new energy, aerospace, new energy vehicles, robots, rail transit, medical equipment and other fields.
Among them, the blade plate Wuxi Turbine Blade Co., Ltd. is a leading manufacturer of aeroengine and energy blades and components, and its subsidiary Nederschloff is the world's most famous supplier of automotive fasteners; The joint-venture partner of Shanghai Morgan is Morgan Group, a world-famous automobile and rail transit solution company.
Bao Ye, Deputy General Manager of Shanghai Jiyou, pointed out to the reporter that Jiyou has a leading market share in a number of subdivisions, including aerospace micro bearings, railway freight bearings, high-speed steel wire cones, high-speed steel taper shank twist drills, and energy big blades The export market of fasteners ranks first in China, and the market of automobile fasteners ranks third in Europe.
Zhuang Hua, general manager of Shanghai Mechanical and Electrical Equipment Co., Ltd., said that after the successful acquisition, the company's competitiveness in the field of the same product category was further strengthened against its domestic and international counterparts; At the same time, it can cooperate with Shanghai electromechanical machinery body by relying on the excellent parts business as the base plate, and extend the superior business units, material manufacturing and process technology capabilities, and continue to expand in hydrogen energy, new energy vehicles, aerospace, robots and other fields.
No tunneling of listed companies by major shareholders
On the other hand, due to the acquisition amount of more than 5 billion yuan, even though it does not constitute a major asset restructuring compared with the balance sheet of Shanghai Electromechanical, the transaction is still questioned by some investors because of its large absolute amount and the particularity of related transactions.
At the online explanation meeting, the relevant principals of Shanghai Electromechanical and Jiyou replied to the investors about the market query.
As for the reasons for adopting cash acquisition, Liu Ping explained that, The advantage of cash acquisition is that it increases the earnings per share of the company. If the method of issuing shares for acquisition is adopted, the minority shareholders' equity will be diluted.
According to the provisions of the Detailed Rules for the Implementation of Non public Issuance of Shares by Listed Companies, the reporter carried out a calculation. Taking May 13, the board of directors of Shanghai Machinery&Electronics Co., Ltd., as the benchmark date for pricing, 80% of the average transaction price of 13.09 yuan in the previous 20 trading days determined the issue price as 10.48 yuan. If Shanghai Machinery&Electronics Co., Ltd. acquires Shanghai Unitalen at the evaluation price determined in the purchase announcement, it needs to issue more than 50000 shares to Shanghai Electric. For Shanghai Electromechanical, the controlling shareholder Shanghai Electric may hold more than 65% of the shares, but from the perspective of the governance requirements of listed companies, it is not conducive to the rationality of the equity structure of listed companies.
At the same time, Liu Ping pointed out to the reporter that in the past, Shanghai Mechatronics has accumulated good retained profits through continuous and steady operation, which is also sufficient for the company to expand its second main business by cash acquisition. The 5.3 billion yuan of consideration paid for the acquisition only accounted for 40% of the company's book capital, so the acquisition did not affect the company's operational liquidity at all.
Liu Ping's answer to the question of whether there is "being used as a cash machine by major shareholders" is brief and ingenious. He pointed out that, At the end of 2023, the balance of monetary capital is about 20.9 billion yuan, and the financing channels of Shanghai Electric are smooth.
According to the annual report of Shanghai Electric, the interest rate range of long-term loans of Shanghai Electric in 2023 is 0.30% to 6.998%, which is lower than the return on equity of Shanghai Jiyou. Replacing cash with corporate assets with higher return on equity is not a "cost-effective business" for Shanghai Electric only from a financial perspective.
In addition, the biggest question investors have about the transaction is the decline of net profit of Shanghai Jiyou in 2023.
The announcement shows that the underlying asset Shanghai Jiyou will achieve an operating revenue of 8.98 billion yuan in 2022, and a net profit attributable to the parent company of 349 million yuan; In 2023, the operating revenue will be 9.585 billion yuan, and the net profit attributable to the parent company will be 237 million yuan.
As for the reasons for the decline in performance, Bao Ye explained to reporters that, As a domestic and overseas dual cycle enterprise, its performance should take into account the related costs and benefits of overseas business. For example, in 2022, Jiyou will achieve a higher profitability in history, mainly because of the strong demand in overseas markets. Secondly, Jiyou will gain about 50 million yuan of exchange earnings in 2022, which is about 38 million yuan more than that in 2023. In 2023, due to the impact of interest rate increases in Europe and the United States, the overseas financing interest rate of Unitalen will increase by about 80 million yuan. Bao Ye also said that the company has repaid about 138 million euros of loans through its own funds, reducing financial costs.
