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The future can be expected! XCMG's mixed reform was officially listed. What changes and potential will the "new XCMG" have

the future can be expected! XCMG's mixed reform was officially listed. What changes and potential will the "new XCMG" have

China Construction Machinery Information

on June 24, 2020, XCMG Group Construction Machinery Co., Ltd. (hereinafter referred to as "XCMG"), the holding company of XCMG machinery, released a big news: the capital increase projects involved in XCMG's mixed ownership reform were officially listed in Jiangsu Property Exchange, and it is planned to raise a total of 15.656 billion yuan from strategic investors and employee stock ownership platforms (the corresponding shareholding ratio is 49%). The termination date of this listing is august20,2020

the maximum transverse tension and compression test force of this method: 2*100kn; This means that the pilot implementation plan for the mixed ownership reform of XCMG Construction Machinery Co., Ltd. approved by the state owned assets supervision and Administration Commission of Xuzhou City on July 25 last year has been officially implemented, and it also marks that XCMG, as a leading enterprise in the field of domestic construction machinery, has made new progress in promoting the mixed ownership reform

On May 11, XCMG held a strategic cooperation signing ceremony with Sumin investment and Sumin chamber of Commerce, marking the official launch of the tripartite cooperation. Sumin investment is the only provincial private capital investment company in Jiangsu Province. It is jointly established by more than 10 well-known private enterprises in Jiangsu Province, such as Shagang Group and Hongdou Group. Su mintou will give full play to its advantages in capital, platform and mechanism, gather high-quality capital from Soviet businessmen, and help XCMG in its mixed reform. Jiangsu Chamber of Commerce, the largest 'Industry Association' in Jiangsu, will do a good job in connection and build a win-win bridge for Jiangsu enterprises

XCMG Co., Ltd. introduced the method of transferring excess stock and increasing capital and shares in the biomaterial industry to strategic investors like the universal experimental machine. Many enterprises from Chinese Mainland and Taiwan also participated in this exhibition. As an important measure to optimize the equity structure, Xuzhou Construction Machinery Group Co., Ltd. (hereinafter referred to as "XCMG"), the former shareholder of XCMG, also transferred the capital contribution corresponding to the 33.33% equity of XCMG before this capital increase to a Provincial wholly state-owned company through non-public agreement

XCMG group, a shareholder of XCMG, and a provincial wholly state-owned company jointly hold no less than 51% of the company's equity after the capital increase, and the strategic investors and employee stock ownership platform jointly hold no more than 49% of the company's equity after the capital increase (including about 2% of the employee stock ownership platform, equivalent to about 639million yuan of employee stock ownership). The final result of the actual capital increase shall prevail. XCMG's owner's equity in 2018 was 32.6 billion yuan; The operating revenue was 57.7 billion yuan and the net profit was 1.668 billion yuan. By the end of March 2020, the owner's equity of the company will be 36.3 billion yuan

according to the public information, there are very few professional and technical talents to be raised RMB 500million will focus on XCMG's intelligent manufacturing transformation and upgrading, new industry development, international expansion, M & A and joint venture cooperation, repayment of bank loans and replenishment of working capital

selection scheme for mixed reform: the mixed reform gives priority to strategic investors of non-public capital, gives priority to intentional strategic investors of industry, promotes XCMG to deepen the reform of system and mechanism, and establishes a market-oriented operation mechanism, incentive and restraint mechanism for XCMG. At the same time, the intended strategic investors or their controlling shareholders are preferred to provide strategic support to XCMG, including but not limited to: brand, technology, market, supply chain, internationalization, digitalization and informatization, capital operation, etc

the board of directors will have external blood to inject

after this capital increase, the board of directors of XCMG Co., Ltd. will have 9 directors, including 1 employee representative director and 3 director seats for strategic investors, which means that if the capital increase is completed, the board of directors of XCMG Co., Ltd., as the decision-making level of the enterprise, will usher in major changes, and the participation of "social forces" in major decisions of XCMG Co., Ltd. will also be promoted to a new high

the capital increase project of XCMG Co., Ltd. has also further promoted the wholly state-owned enterprises to fully open the situation of mixed ownership reform in the secondary subsidiaries

new XCMG, three expectations

according to the public information, XCMG's mixed reform, "the assets such as excavators, tower cranes and concrete machinery currently belong to the major shareholder XCMG Co., Ltd., and XCMG's heavy trucks will be transferred to XCMG group free of charge, which is not within the scope of the mixed reform.

the" new XCMG "after the mixed reform has three expectations, namely, mixed reform, excavator and profitability improvement

1. At present, there are differences in mechanism, product structure and profitability of "old XCMG". Through the mixed reform of controlling shareholders, it may be expected to stimulate the vitality of listed companies and lay a good mechanism foundation

II. As the largest construction machinery sector under XCMG group, excavators are expected to improve the profitability of listed companies after being injected into listed companies

III. The overall listing of construction machinery assets such as excavators will also complement the product structure of listed companies. At present, after the assets of excavators, mining machines, tower cranes and concrete machinery under the parent company are injected, the revenue scale of "new XCMG" - that is, the construction machinery sector of XCMG group will reach a higher level

profit adjustment and forecast, with a promising prospect

it is estimated that XCMG's annual net profit will be RMB 4.6 billion, 5.2 billion and 5.6 billion, an increase of 28%, 13% and 7%; EPS is 0.59, 0.67 and 0.72 yuan; PE is 10, 9 and 8 times. Considering that the company is expected to be reborn into a "new XCMG", it will be given 12 times PE in 2021, with a target market value of 62.4 billion yuan (excluding the overall listing of excavators, etc.), and a monthly target price of 7.97 yuan. For example, in the future, construction machinery assets such as excavators will be listed as a whole. It is predicted that the overall income and market value of "new XCMG" in the future are expected to gradually approach 100billion yuan

as a leading enterprise in the field of construction machinery in Jiangsu and China, XCMG group's mixed reform process will also change from "state-owned sole proprietorship" to "state-owned holding", ushering in new challenges and opportunities

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