On the evening of June 15th, Nanjing Chemical Fiber (600889.SH) announced that it had stopped planning to acquire the control of Shanghai Yueke New Materials Co., Ltd. (hereinafter referred to as "Shanghai Yueke") by issuing shares and paying cash and raising supporting funds. Matters, the company's stock resumed trading on June 16.
In early June of this year, Nanjing Chemical Fiber suspended trading and planned to acquire the control of Shanghai Yueke New Materials Co., Ltd. and raise supporting funds. However, because the transaction involves some uncertain factors, it is difficult to clarify and form a concrete and feasible plan in a short period of time to continue to advance the asset reorganization, and the reorganization has been declared terminated.
When talking about the impact of the termination of the transaction on the company, Nanjing Chemical Fiber stated that the parties to the transaction did not reach a formal agreement on the specific plan of the transaction except the "Investment Intention Agreement." The termination of this transaction is a decision made by the company after careful research and will not cause a significant adverse impact on the company's production and operation.
Corporate transformation is imminent
The main business of Nanjing Chemical Fiber mainly covers viscose fiber and tap water business, of which the tap water business accounted for less than 5% of the total revenue, and the viscose fiber business alone supported the company's overall performance. However, the viscose fiber industry has experienced significant price fluctuations in recent years, and industry development has entered a bottleneck period.
However, in recent years, affected by the poor overall industry sentiment, Nanjing Chemical Fiber has continued to face operating pressure. In the 2019 annual report, it was said that the environment for domestic economic development in 2019 was more complicated and severe than in 2018. The outbreak of a trade war between China and the United States had a severe impact on the textile industry. The fluctuation of the RMB exchange rate increased, the export of textiles was not smooth, and the viscose was short. The operating rate of the next fiber companies has fallen sharply, and the prices of textile raw materials have all dropped by more than 10%. The price of staple fiber per ton has dropped from 13 thousand and 300 yuan at the end of 2018 to 9200 yuan, a decrease of nearly 30%, a 20-year low. Product sales are difficult, and manufacturers' inventories have reached their limit, and production has been cut, and production has been stopped to reduce losses.
It is reported that, in response to the above situation, Jiangsu Jinling Cellulose Fiber Co., Ltd., a wholly-owned subsidiary of Nanjing Chemical Fiber, has stopped production for three months from May 2019 to repair and remove chemical inventory, resulting in a loss of 52 million yuan.
Under the pressure of performance, the market renewed the call for Nanjing Chemical Fiber to "develop the second main business based on the main business of viscose fiber".
Lyocell fiber will come out at the end of the year
Chen Bo, secretary of the company's board of directors, said that the task of company transformation is indeed more urgent, and the determination of transformation is also very firm. At present, the company is stepping up the construction of the first phase of the 40,000 tons/year lyocell fiber project of the new solvent cellulose fiber (Lyocell) project with an annual output of 100,000 tons. It is expected to be completed and put into trial operation by the end of 2020.
Lyocell fiber belongs to the third generation of viscose staple fiber products. The production process is green and environmentally friendly, the product performance is good, and it can be naturally degraded after use. It is ‘green fiber’ in the 21st century, has broad development space and good profit prospects, and is the main direction of the viscose fiber industry. In addition to upgrading the main business, the company is also actively exploring M&A business, changing the single status quo of the company's industrial structure, and achieving the development of'two-wheel drive' as soon as possible.
