CSSC Defense (600685): Plan to inject the main power assets of CSC to build the group’s power platform

CSSC Defense (600685): Plan to inject the main power assets of CSC to build the group’s power platform

Event March 29, CSSC Defense issued a notice of suspension of major asset reorganizations and adjusted major major asset reorganization plans.

This major asset restructuring plan is planned to be adjusted as follows: The proposed assets to be placed are 100% equity of Hudong Heavy Machinery Co., Ltd., 100% equity of CSSC Power Co., Ltd., 51% equity of CSSC Power Research Institute Co., Ltd., and Shanghai CSSC Mitsui15% equity of Shipbuilding Diesel Engine Co., Ltd .; the proposed assets are part of the shares of Guangzhou Shipyard International and Huangpu Wenchong held by the company.

The counterparty of the transaction intends to change to CSSC, etc. This transaction constitutes a connected transaction.

The transaction method is asset replacement, which no longer involves issuing shares to purchase assets.

Brief Comment On March 29, CSSC Defense issued a major asset reorganization suspension announcement and adjusted the major asset reorganization plan.

This major asset restructuring plan is planned to be adjusted as follows: The proposed assets to be placed are 100% equity of Hudong Heavy Machinery Co., Ltd., 100% equity of CSSC Power Co., Ltd., 51% equity of CSSC Power Research Institute Co., Ltd., and Shanghai CSSC Mitsui15% equity of Shipbuilding Diesel Engine Co., Ltd .; the proposed assets are part of the shares of Guangzhou Shipyard International and Huangpu Wenchong held by the company.

We believe that this asset reorganization effectively prevented the company from continuing risks, 杭州桑拿网 and China Shipbuilding Defense increased significantly in 201818.

60,000 yuan, injected into Hudong Heavy Machinery and other profitable assets to improve the profitability of listed companies.

At the same time, it also helps to increase the group’s asset securitization rate.

After the reorganization, the main business of CSSC Defense will be changed and it will become the power asset platform of CSSC.

Prior to this asset reorganization, the company owned Guangzhou Shipyard International, Huangpu Wenchong and its main subsidiaries, and its business covers four major sectors: defense equipment, ship repair and construction, offshore engineering, and non-shipping business.

With the release of major assets, Hudong Heavy Machinery and CSSC Power became the two wholly-owned subsidiaries of CSSC Defense.

In addition, Hudong Heavy Machinery also holds a 49% stake in CSSC Power Research Institute and a 51% stake in Shanghai CSSC Mitsui.

All in all, through this asset reorganization, the platform positioning of CSC’s affiliated listed companies has become clearer. CSSC Defense Coverage Group has two of the most important power assets, becoming its main power asset platform.

The company’s main business changed to become a subsidiary power asset platform of CSC.

Hudong heavy machinery business mainly produces low-speed engines, and its main products include high-power medium- and low-speed diesel engines; China Shipbuilding Power’s main business is medium-speed engine production, including some low-speed engine products; China Shipbuilding Mitsui’s main products are low-speed diesel engines;The CSSC Research Institute focuses on research on key technologies for low- and medium-speed diesel engines.

This asset reorganization has changed the company’s main business. CSSC Defense will cover the two most important power assets of the group in the future and become its main power asset platform.

The restructuring to place expansion assets and inject profitable assets will help improve the company’s performance.

This asset restructuring will gradually restore the expected assets of Guangzhou Shipyard International and Huangpu Wenchong, and put them into two profitable assets of Hudong Heavy Machinery and CSSC Power.

CSSC Defense decreased by 18 in 2018.

600 million, of which Guangzhou Shipyard International and Huangpu Wenchong each exceeded 1 billion.

Hudong Heavy Machinery achieved operating income of 4.2 billion and net profit of 2 in 2018.

2.2 billion; CSSC Power achieved operating income of 14 in 2017.

60,000 yuan, with a total profit of 5.5 million yuan.

CSSC Mitsui’s 2018 operating income was 20.

920,000 yuan, net profit is 0.

9.5 billion.

Through asset reorganization and replacement, the company puts in extended assets and puts in profitable assets, which is conducive to improving profitability.