Central To The "Fierce Battle": 10 Billion Assets Will Fall To Whom?

In June 10th, "the online collective reception day of Tianjin listed companies" activities, Tianjin central semiconductor Limited by Share Ltd (hereinafter referred to as central shares, 002129.SZ) has become the focus of investors' attention.

This is not surprising. Under the influence of the mixed ownership of Tianjin central electronic information group Limited (hereinafter referred to as "central group"), central shares, one of the core assets, are under the spotlight. In this interactive activity, the progress of the mixed transformation of the central group has naturally become a hot issue. In response, the latest response of the central shares is that "the main body of the reform is the central group level of the controlling shareholder of the company. The listing of mixed changes has been completed, and the company will continue to pay attention to the progress of the matter and fulfill the obligation of information disclosure in a timely manner."

A group of "gossip" bidders, including TCL Technology (000100.SZ), Tongwei shares (600438.SH), Wuxi Industrial Development Group, overseas Chinese town, and China Aviation Science and engineering group, are also at the forefront of public opinion. Even 601012.SH, a rival in central shares, has entered the list of candidates. In twenty-first Century, the economic report reporters learned that at present, there are very few statements, and the progress of mixed reform is complicated and confusing. Insiders say that TCL technology has an advantage at present, but others believe that Tongwei shares are the best end result of the central reform.

Under the various opinions, the result of the mixed reform of the central group or the fastest after the end of the share listing in June 16th is clear.

Focus on central shares

In May 20th, the 100% equity interest of the central group was officially listed on the Tianjin stock exchange and the transfer price was less than 11 billion yuan. The equity transfer involves two listed companies, including central shares, 002134.SZ, Tianjin, Tianjin Central Communications Computer Co., Ltd., Tianjin Central Investment Co., Ltd., a wholly owned subsidiary, and a total of 96 other subsidiary companies. Among them, the central shares are the most attractive. By the end of June 10th, the market value of the group's holdings of central shares exceeded 14 billion 800 million yuan.

The central group is a large state-owned enterprise in Tianjin. It owns four A share listed companies such as central shares, 712 (603712.SH), Tianjin prin, Leshan electric power (600644.SH), and other wholly owned, holding or participating enterprises, with a total number of over 200.

According to the latest report of the group's latest financial results (combined caliber) obtained by the economic news reporters in twenty-first Century, the total assets of the group were 68 billion 602 million yuan and net assets of 29 billion 127 million yuan as of the first quarter of 2020. In the first quarter of this year, the group achieved a total revenue of 5 billion 463 million yuan, down 6.10% compared to the same period last year. The net profit attributable to the owners of the parent company was 27 million yuan and 506 million yuan in the same period last year.

10 billion stake in the market value, so that the central shares become the eyes of the central group to change the "core assets". According to the 9 weight assessment indicators published by the transferor, the score of the "industrial synergy" index reaches 9 points, and the weight ranks second. Many industry insiders told reporters on twenty-first Century economic report that when assessing the "industrial synergy", the degree of matching with the central shares will be considered to a large extent. In twenty-first Century, the economic report reporter noted that the conditions of "industrial synergy" are divided into three parts. The first is "the relationship between the transferee or its actual controller and the central group."

As a matter of fact, the shares of central bank will become the core asset of the central group's mixed transformation, not only because of its larger company size, but also because of its important position in the field of PV and semiconductor.

Since the completion of the stock reform in 2004 and the landing of A shares in 2007, the central share has developed into a pivotal high-tech enterprise in China. The total assets and net assets of central shares were 50 billion 677 million yuan and 21 billion 38 million yuan respectively at the end of the first quarter of this year, according to financial reports. As of June 10th, the total market value of central shares reached 54 billion yuan.

What kind of company is central shares? Under the dual main business mode, "photovoltaic company" or "semiconductor company" is hard to define it completely. However, in the industry's view, the "PV" label of central shares is more prominent than the "semiconductor" label. Especially in the field of single crystal, it is the only photovoltaic company in China that can compete with Longji shares.

A senior analyst with a new energy industry who declined to be named told the twenty-first Century business news reporter that the vast majority of the income of the central bank's current business is based on photovoltaic business, and semiconductor materials business sometimes even results in drag on performance.

Financial data show that in 2019, the shares of central bank reached 16 billion 887 million yuan, an increase of 22.76% over the same period last year, and the net profit attributable to shareholders of listed companies was 904 million yuan, an increase of 42.93% over the same period last year. But from the point of view of revenue structure, the PV material business of the company during the reporting period achieved operating income of 14 billion 921 million yuan, accounting for 88.36%, and gross profit of 2 billion 667 million yuan, accounting for 81.02%.

Photovoltaic business contributed nearly 90% of revenue, which is the normal business structure of central shares in recent years. This is due to the continuous efforts of the company in the field of photovoltaic. On the one hand, in asset mergers and acquisitions, the company has announced since 2016 that it acquired 90% stake in Guodian PV Company and Total's SunPower part of its PV assets, while on the other hand, in product development, the company achieved CFZ technology industrialization in the field of monocrystalline silicon in 2015, and launched the 12 inch large silicon chip "Kuai" M12 Series in 2019. Products, triggering the discussion of large scale silicon wafer.

However, in the industry view, the central share is a regrettable PV Company. As a state-owned enterprise in the field of photovoltaic manufacturing, central shares have been leading the way to being overturned.

And Longji shares, also known as the domestic "single crystal double male" central shares, before 2015, whether from the market scale or performance level, once suppressed Longji shares. But since 2015, with the rapid recognition of the single crystal technology and the rapid expansion of capacity, Longji shares soon surpassed central shares to become the world's largest manufacturer of single crystal products. From the scale of revenue, the revenue of Longji shares reached 8 billion 599 million yuan in the first quarter of this year, close to two times that of central shares.

In an interview with the economic news reporters in twenty-first Century, the aforementioned analysts said that the identity and system of the state-owned enterprises had led to some smooth running mechanism of the central shares in the past few years, and the mixed reform would at least bring about improvement in management and operation efficiency.

The latest statement of "gossip" bidders

In a long list of "gossip" bidders, there are few. But the silence is not an investor's enthusiasm, so Longji shares and Tongwei shares have recently responded.

Longji's latest response is clear. In June 8th, on the Shanghai Stock Exchange investor interaction platform, it responded explicitly to the question of whether to consider participating in the auction of shares in the central group.

The latest response of Tongwei shares did not explicitly deny participation. The company responded to investors' similar questions for two consecutive days in June 8th and June 9th. "The company has not yet received the relevant information", "the announcement made by the company on the Shanghai stock exchange website".

In addition, in twenty-first Century, the business reporter reported that another popular bidder, TCL technology, has not made clear its participation in the mix up of the central group in the near future. But at the end of May, the company said publicly that semiconductor display technology and materials are one of the most important core industries, and its business is mainly focused on the high-tech field with semiconductor display and materials as the core.

The group also said it would increase the scale and efficiency of the industry through the development and merger and reorganization.

In fact, TCL technology is one of the earliest scandals among many bidders. As early as 2019, rumors of its acquisition of central shares were rampant.

After stripping off smart terminals and related services in April last year, TCL began to exert its strength in the semiconductor field and renamed it TCL technology in February this year. TCL technology is very ambitious in semiconductor industry. Recently, it has launched a takeover of Wuhan Huaxing 39.95% shares. The transaction price is 4 billion 217 million yuan.

The relationship between TCL technology and the Tianjin municipal government is quite different. In November 2019, the Group signed a strategic cooperation framework agreement with the Tianjin municipal government, which will focus on innovative business including semiconductor materials and devices, new energy and environmental protection, core basic electronic components, industrial Internet and intelligent manufacturing, and build a more complete R & D and manufacturing system.

It is worth mentioning that in January 19th of this year, TCL technology had responded to the rumour that he had wanted to buy two listed companies in Tianjin, and said that "no definite intention has yet been reached". This means that TCL technology is indeed participating.

The senior analyst told the twenty-first Century business reporter that the layout of TCL technology in recent years in the semiconductor sector and the adequacy of funds are the most prominent advantages of many competitors. But from the perspective of Industrial Synergy, this person is more optimistic about Tongwei shares.

"As a private enterprise, Tongwei shares have advantages in the synergy and efficiency of the PV sector." The analysts pointed out that Tongwei shares have a large market share in polycrystalline silicon materials and batteries and components. In addition, the streamlined experience of the company in terms of operation management and other expenses will help to enhance the net profit margin of central shares. In twenty-first Century, the economic news reporter found that the net profit margin of central shares in the first quarter of this year was 8.22%, while that of Longji shares was 22.85% during the same period.

However, the adequacy of funds or whether Tongwei shares can become a winner of the final level. At the end of the first quarter, the company's cash balance at the end of the year was 14 billion 612 million yuan, less than TCL technology nearly 4 billion yuan. At the same time, apart from this 11 billion yuan equity bid, Tongwei shares need to reserve room for the 20 billion yuan expansion plan announced in February this year.

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