Big Mac' shot, won 40 billion chemical industry leader!

On September 3, Luxi Chemical's "Luxi Chemical Group Co., Ltd. Acquisition Report" (hereinafter referred to as "the "Acquisition Report""), Sinochem acquired Sinochem Group and China National Chemical Corporation through free transfer of state-owned equity 100% of the equity, thereby indirectly acquiring 931 million shares of Luxi Chemical held by Luxi Group and Sinochem Investment, a subsidiary of Sinochem Group, accounting for approximately 48.93% of the company's total share capital.

Among them, Sinochem holds 492 million shares of Luxi Chemical through its subsidiary holding company Luxi Group, accounting for 25.85% of the total share capital of Luxi Chemicals, and 439 million shares of Luxi Chemicals held through its subsidiary holding company Sinochem Investment , Accounting for 23.08% of Luxi Chemical's total equity. Prior to this, Sinochem Investment was Luxi Chemical's largest shareholder. After the completion of the reorganization, Sinochem's shareholding ratio accounted for nearly half.

Luxi Chemical's performance is improving, and Sinochem said that it will not adjust Luxi Chemical's main business at present.

According to the 2021 semi-annual report, Luxi Chemicals achieved operating income of 14.471 billion yuan in the first half of the year, an increase of 94.73% year-on-year; net profit attributable to parent companies was 2.632 billion yuan, an increase of 1064.17% year-on-year; operating income in the second quarter was 8.255 billion yuan, an increase of 32.8% from the previous quarter; Parent net profit was 1.633 billion yuan, a month-on-month increase of 63.42%.

Since 2021, the prices of the company's main products such as butanol, polycarbonate, caprolactam, nylon 6, and DMC have risen to varying degrees. The company has built an integrated new material industrial park and formed a relatively complete industrial chain of coal chemical, salt chemical, fluorosilicon chemical and chemical new materials. The company is also expanding and developing high-end new materials, with a total investment of up to 14 billion yuan.

Luxi Chemical's fluorine chemical business, basic chemical business, new chemical material business and chemical fertilizer business have similar situations with related companies under China National Chemical Corporation. With the completion of Sinochem’s reorganization, on the one hand, Luxi Chemical will also receive more resource support; on the other hand, Sinochem’s subsidiaries include Sinochem Lantian, Sinochem Plastics, Yangnong Group and Luxi Chemical. In cases where some products overlap or are similar, there is competition in the same industry.

In order to standardize and eliminate competition in the industry, Sinochem is studying the integration plan of related companies. However, due to the geographical distribution of related companies and the involvement of multiple listed entities, there are many influencing factors that need to be considered in formulating related integration plans, the workload of communicating with related parties is relatively large, and the related regulatory rules and procedures involved are relatively complex. On the signing date of this report, Sinochem has no clear business follow-up specific integration plan.