Incubation Lianhong Xinke Listed, Lenovo Holdings Will Focus On Big Technology Field

Ning min and Li Peng, who took over the "baton" of Lenovo Holdings (03396. HK) from Liu Chuanzhi and Zhu Linan in December last year, ushered in the first "big event" since taking office, namely, the listing of holding company Lianhong Xinke.

It is reported that Lianhong Xinke (003022. SZ) has issued 147.36 million shares at a price of 11.46 yuan per share. On December 15, the stock price of Lianhong Xinke rose 44% to 16.5 yuan / share. As of the closing, Lianhong Xinke closed at 18.15 yuan / share, with a total market value of 18.6 billion yuan. On December 16, however, the stock fell 6%.

After listing, Lenovo holdings indirectly held 51.77% of the shares in Lianhong Xinke. "It is an important fruit of the company's contribution to the industrialization of the achievements of the Chinese Academy of Sciences by transforming the DMTO technology of the first prize of the National Technological Invention Award of Dalian Institute of chemistry and physics, and finally hatching Lianhong Xinke to be listed on the market." Ning min, chairman of Lenovo holdings, said.

Lianhong Xinke rings the bell. Information map

Starting from "green space investment"

It is understood that Lianhong Xinke is a high-tech enterprise engaged in the R & D, production and sales of advanced polymer materials and special fine materials. The main products are ethylene vinyl acetate copolymer (EVA), polypropylene (PP), ethylene oxide derivative (EOD), etc., leading the market share in many segments.

According to its prospectus, Lianhong's EVA products are mainly high-end products with high VA content, which are used in the fields of photovoltaic film materials, cable materials and other fields. Its first developed EVA photovoltaic adhesive film material breaks the foreign monopoly. According to the statistics of jinlianchuang, Lianhong is one of the largest suppliers of thin-walled injection polypropylene specialty materials in China, with a market share of nearly 25% in 2019, ranking first in the industry.

At present, the company has built a differentiated methanol to olefin deep-processing industrial chain, including three sub industrial chains: "methanol propylene polypropylene special material", "methanol ethylene ethylene ethylene vinyl acetate copolymer high-end material" and "methanol ethylene oxide ethylene oxide ethylene oxide derivatives".

"In 2010, Lenovo set a goal of going public and building a diversified industrial investment group. At that time, we selected several industries, among which new materials were an important part." Ning Min said, "we started with" green space investment "and worked out to move down the methanol to olefin industrial chain. Today, we can see the complete realization of this strategy."

He said that in the strategic investment field selected by Lenovo holdings, the company will first strengthen its determination to hold for a long time. Secondly, it hopes to become a controlling shareholder or an important shareholder in the invested enterprises, especially for core assets. "At the beginning, we made great determination. On the one hand, this field is completely unfamiliar to Lenovo; on the other hand, the investment return period of new material industry is relatively long." Ning Min said.

Strong investment determination and patience have also given Lenovo great returns. CEO Li Peng said that up to now, the balance of equity investment is still 1.83 billion yuan. According to the performance of Lianhong Xinke, Lenovo Holdings has a market value of less than 11 billion yuan.

"The IRR (internal rate of return) is about 26% Li Peng told reporters, "for such an industrial investment, the IRR of 26% is already a very good level of return. Lenovo still holds more than 51% of the equity so far, and I believe that there will also be rich returns in the future."

Building new material industry group

According to statistics, in 2015, the total output value of China's new chemical materials industry accounted for 2.5% of the total output value of chemical industry, and the domestic self-sufficiency rate was only 65%. At present, China's new chemical materials industry is still facing bottlenecks in terms of total and structure. The total output value of new chemical materials industry accounts for 8.7% of the total output value of chemical industry. There are still more than 130 kinds of new chemical materials that can not be produced independently.

As one of the strategic emerging industries in the 14th five year plan, new chemical materials have a huge development space in the future. According to incomplete statistics of research institutions, since the 12th Five Year Plan, the market scale of China's new material industry has expanded rapidly, from 0.8 trillion yuan in 2011 to 4.57 trillion yuan in 2019. It is estimated that the industrial scale will grow to 8 trillion yuan by 2025.

According to the company's prospectus, the funds raised from the IPO of Lianhong Xinke will be used for the construction of 100000 tons / year by-product C4 / C5 comprehensive utilization and supporting technology transformation project of olefin separation system, upgrading and transformation project of EVA plant tubular tail technology, 65000 tons / year special fine chemicals project, etc. After the project is completed and put into operation, the company's production capacity will be greatly improved, which will help to further improve the operation level and expand the market share.

"Listing is a good opportunity for Lianhong. By landing on the capital market, the company can obtain more financing means, raise more funds, and help the enterprise to become bigger and stronger." Zheng Yueming, chairman of Lianhong Xinke, told reporters.

Specifically, on the one hand, Lianhong will further increase its investment in innovation and research, continuously promote the development of new products through independent research and collaborative innovation; on the other hand, it will focus on industrial upgrading and consumption upgrading, focusing on investment layout in the field of new material "choke".

"Make full use of the innovative resources of CAS, give full play to the advantages of the alliance, accelerate the transformation of scientific and technological achievements, and cultivate new growth points for the company." "At the same time, through investment and M & A, including international M & A, we will further enhance the competitiveness of enterprises," Zheng said

It is worth mentioning that at present, the company has taken the lead in establishing the Alliance for technological innovation and industrialization of new chemical materials of Chinese Academy of Sciences. "Through the construction of the transformation base, we have explored the mode of promoting the transformation of scientific and technological achievements. As the president unit, we have the priority of transfer and transformation right, and can realize the industrialization of new technology more conveniently." Zheng Yueming said.

Optimistic about big science and technology

2020 is the ending year of Lenovo holding 2.0 strategy, and 2021 is the first year of Lenovo holding strategy 3.0. It is very important for Lenovo holding to establish the direction of follow-up strategy.

After taking over the "baton" of Liu Chuanzhi and Zhu Linan, the new management team of Lenovo holdings admitted that the year had been "very difficult". "No one would have thought that the outbreak of the new epidemic would make such a great change in the world." "On the other hand, after 36 years of leadership, the succession of management is also very important," Ning said

As for the company's future strategy, Ning Min said that Lenovo Holdings has seriously reviewed the previous strategy this year and formulated the next strategic direction based on the current macro environment and its own advantages and disadvantages.

"The improvement of our stock business performance, including tapping potential, transformation and upgrading, and whether we increase or withdraw investment, is very important." Li Peng, CEO of Lenovo holdings, said when explaining the company's future strategy.

According to public information, Lenovo Holdings has a total assets of 650 billion yuan, including strategic investment sectors such as it, finance, agriculture, consumption and new materials, as well as financial investment business sectors including Junlian, Hongyi and Lenovo star.

"Make the business focused on strategy better, and consider withdrawing some businesses to get back resources, so as to make the whole basic market of the company more dynamic." Li Peng said, "this is a very important thing to further improve the overall investment performance of Lenovo holdings."

While doing these things, Lenovo holdings is also actively studying the next step of new investment direction. "We think the main direction will be science and technology. We will develop in the field of big science and technology and make some new investment." "We are not in the pursuit of fashion, but the strategic thinking of building pillar assets around the medium and long term, which will better meet the national situation and needs," Li Peng said

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