On the evening of April 26, Oriental Shenghong (000301) issued an announcement that the listed company is planning to purchase all the equity or controlling rights of Jiangsu Serbon Petrochemical Co., Ltd. (hereinafter referred to as Serbon) by issuing shares and paying cash, and raise supporting facilities funds.
The announcement disclosed that the transaction is expected to constitute a major asset reorganization and a connected transaction, but does not constitute a reorganization and listing. Oriental Shenghong stocks and convertible corporate bonds (Shenghong convertible bonds) will be suspended from April 26.
According to Dongfang Shenghong’s disclosure, the counterparty of the reorganization is all or part of the shareholders of Serbon. The listed company has signed a "Cooperation Framework Agreement" with Serbon’s controlling shareholder Shenghong Petrochemical Group Co., Ltd., and Dongfang Shenghong intends to issue Shares and payment in cash to acquire all equity or controlling rights in Serbon.
Jiangsu Serbon Petrochemical Co., Ltd. was established in December 2010 with a registered capital of 5.588 billion yuan. It is a holding subsidiary of Shenghong Group. The company's main business scope includes the production of high value-added olefin derivatives, etc., which belong to the olefin and derivatives industry chain in the petrochemical industry. At present, Serbon has formed a diversified product structure for the coordinated development of basic chemicals and fine chemicals. The downstream application fields of the products are widely distributed in chemical fiber, washing, pesticide, medicine, construction, polyurethane products and other industries. The designed production capacity of the device is approximately 2.4 million tons per year (calculated by methanol).
The main business of Dongfang Shenghong includes the research and development, production and sales of civilian polyester filaments, as well as the production and sales of PTA and thermoelectricity. With the continuous expansion of business segments, Dongfang Shenghong has gradually integrated vertically from downstream chemical fiber to upstream petrochemical and refining industry chains, forming a complete "crude oil refining-PX/ethylene glycol-PTA-polyester-chemical fiber" industrial chain The structure of integrated management and development.
Recently, the 2020 annual report disclosed by Oriental Shenghong showed that during the reporting period, the listed company achieved operating income of 22.777 billion yuan, a year-on-year decrease of 8.48%; net profit of 316 million yuan, a year-on-year decrease of 80.40%.
Dongfang Shenghong said that the decline in performance this period is mainly due to the huge impact of the new crown pneumonia epidemic spreading around the world in 2020 on the macro economy. The downstream demand of the chemical fiber and petrochemical industry has dropped significantly, and the impact of drastic fluctuations in oil prices has been superimposed on the industry. The price gap between products and raw materials has narrowed, and profit margins have been compressed.
"At present, the impact has been gradually eliminated. With the large-scale launch of the new crown vaccine at the end of 2020 and the anticipation of epidemic prevention and control, confidence in the recovery of the domestic and foreign economies and industries has increased, and the downstream industry demand has gradually maintained a stable trend." Oriental Shenghong in the annual report Said.
Oriental Shenghong's performance forecast for the first quarter of 2021 shows that the net profit attributable to shareholders of listed companies in the first quarter is expected to be 500 million to 660 million yuan, an increase of 153.79% to 235% year-on-year. During the reporting period, the 200,000-ton differentiated functional chemical fiber project of Ganghong Fiber and the 60,000-tonne PET recycled fiber project of Zhonglu Technology was completed and put into production in the second half of 2020, which increased its profit contribution year-on-year.
The Everbright Securities Research Report pointed out that in view of the expected improvement of the epidemic at home and abroad, and the return of crude oil prices to the level before the epidemic, the rebound in demand in the downstream textile and clothing industry will drive the boom of the entire chemical fiber industry. With the gradual slowdown of new production capacity and the exit of small and medium-sized production capacity, the industry supply and demand pattern is expected to usher in a marginal improvement.
