Xinjiang Tianye (600075) Comment on important matters: update Tianneng chemical plan landing positive
The company announced the plan of “M & A Group Tianneng Chemical 45 to introduce PVC and related integrated assets” to accelerate the national reform and optimize the industrial structure.
We are optimistic about the company’s long-term development as a local high-quality country reform and actively recommend it.
The company will include the Group’s 45 preliminary high-quality PVC production capacity.
This announcement of the company will purchase 100% equity of Tianneng Chemical held by Tianye Group and Jinfu Investment through issuing shares, convertible bonds and paying cash.
Tianneng Chemical has a 100% equity rating of 48.
39 ppm (that is, the overall value and price of this transaction).
The gradual deduction of non-returning mothers’ performance commitments in the next three years is 2019-202115.
72 trillion or 15 in 2020-2022.
90 ppm (depending on reconstruction time), corresponding to an estimated multiple of 9 times.
The actual performance may look better. Tianneng’s actual net profit attributable to mothers in 2017/2018 was 8.
77 ppm; There is pressure on the price of PVC and caustic soda in 2019. Under such circumstances, the net profit attributable to mothers from January to May 2019 remains 2.
6.5 billion, once the price rebounds, Tianneng’s performance is also expected to significantly increase.
Equity bonds are issued at the same time, and the share capital is expected to increase by 9.
6.5 billion shares.
The payment to Tianneng Chemical is intended to be issued in the form of shares, convertible bonds and 四川耍耍网 cash, of which: 1, the issue of shares 3.
8.7 billion shares (price 5.
94 yuan / share, locked for three years); 2, 3 million convertible bonds issued (initial transfer of 5).
94 yuan, corresponding to 0.
5.1 billion shares); raised 2.2 billion US dollars, assuming 90% of yesterday’s closing price (ie 4.
17 yuan / share), corresponding to 5.
2.8 billion shares.
The company’s current share capital is 9.
7.3 billion shares, with an estimated share capital of 19 after issuance.
3.8 billion (assuming all converted bonds are converted into shares), corresponding to the closing price of 4 on October 8.
63 yuan / 9 billion market value.
The company divested non-main business assets according to the strategy and continuously optimized the industrial structure.
Military, the company continued to promote reforms in accordance with the strategy: 1) In December 2018, Shihezi Tianye Tomato Products Co., Ltd. 62 was approved.
967% equity transfer plan; 2) In February 2019, the company publicly pre-listed and transferred 100% equity of Beijing Tianye Oasis Technology Development Co., Ltd. and 100% equity of Jinghe Xinshi Transportation Co., Ltd.
The above three companies have completed audits and evaluations and plan to formally list.
The company plans to speed up the progress of divestiture of non-main business assets and reorganization of assets. In accordance with the reform requirements of state-owned and state-owned enterprises, strengthen the ability and competitiveness to respond to market risks, fight reforms, and focus on the development of chemical and new materials.
The plasma project is advancing rapidly, and it is expected to significantly increase its performance after reaching production.
The company and the group established a joint venture, Tianye Huihe, to undertake the Group’s one million tons of butyl phase 60 additive project.
At present, the core reactor production capacity adopted by the project, the scale of a single set of production lines, and product quality are at the internal leading level. The device is large, intensive, and large-scale competitive advantages will be fully reflected. It is expected to achieve annual sales revenue of 4.2 billion yuan after completion.Realize profit 8.
4 trillion, a significant increase in performance.
Risk factors: market demand and product price risk; project progress is less than expected; restructuring is uncertain.
Investment suggestion: The company will accelerate the national reform and optimize the industrial structure.
Optimistic about the company’s long-term development and maintain the company’s EPS forecast for 2019/20/21 to 0.54/0.
84 yuan / share, given a target price of 11 yuan (corresponding to 20 times in 2019), maintain “Buy” rating.