Nearly trillion assets restructuring of North-South vessels

The thunder of the merger and reorganization of the North and South ships is ringing. It's going to rain in four years. Eight A-share companies under the flags of North and South Ships announced at the same time that China Shipbuilding Heavy Industry Group Limited (CSHI) was planning a strategic restructuring with China Shipbuilding Industry Group Limited (CSHI). The relevant plans have not yet been determined and the plans need to be obtained from the relevant competent authorities. A

In fact, the voice of North-South ship restructuring began in 2015. North-South high-level ship has said that China Shipping Group is one of the first batch of central-enterprise mixed reform pilot. Previously, high-level exchanges between North and South vessels were conducted.

Like North-South vehicles, North-South vessels are twin brothers. Twenty years ago, under the background of state-owned enterprise reform, they separated and entered the market independently.

A shipbuilder said that the ship market is still in the cold winter, the contradiction of structural overcapacity still exists, and vicious competition for the market is unavoidable. Shipbuilding market is a large international market. The two sides work together to complement each other's strengths and weaknesses, and make concerted efforts to improve the competitiveness of China's shipbuilding industry in the international market. It is worth mentioning that in recent years, the profitability of North-South vessels is not strong, but their asset-liability ratio shows a downward trend. The expected merger and reorganization of North-South vessels has entered a practical stage, which makes the market more exciting, and the share prices of eight A-share companies have soared collectively.

In the secondary market yesterday, stimulated by the news of restructuring of China Shipping Heavy Industry and China Shipping Group, eight A-share companies of the two groups performed well. All the eight companies opened with the stop-and-rise board or were affected by the adjustment of the market. As of yesterday afternoon's closing, China Emergency and Jiuzhiyang two companies firmly sealed the stop-and-rise. Six companies, such as China Shipping, have adjusted. In the end, except for the 4.65% rise in China's coastal defence, the other five companies all increased by more than 5%.

In fact, the North and South originated from the same origin. On July 1, 1999, China Shipping Industry Corporation was divided into two parts. China Shipping Group and China Shipping Heavy Industry were established to divide the "sphere of influence" with the Yangtze River as the boundary. The products of China Shipping Group include bulk carriers, oil tankers, container ships and other major types of ships, LNG vessels, marine engineering equipment and other high-tech and high-value-added products. The industry is called "South Boat". Known as the "North Ship", China Shipping Heavy Industry is mainly engaged in research and development and production of naval equipment, civil ships and ancillary, non-ship equipment.

Up to now, China Shipping Group represented by Nanfang has three A-share companies: China Shipping, China Shipping Defense and China Shipping Science and Technology, while China Shipping Heavy Industry represented by North Shipping has five listed companies, namely, China Heavy Industry, China Emergency Response, Jiuzhiyang, China Power and China Coastal Defense.

The public information shows that as early as 2015, after the restructuring of North-South vehicles, the voice of merger and reorganization of North-South vessels has been increasing. Subsequently, a series of reorganization paved the way for capital operations.

On the eve of National Day 2017, a number of A-share companies under the flags of the North and South of China suspended trading and announced major planning issues. Under the flag of North Ship, it purchased 42.99% of Dalian Ship (Dalian Ship Heavy Industry) and 36.15% of Wuchang Ship Heavy Industry Group Limited (Wuchang Ship Heavy Industry) by issuing shares. In the previous month, eight enterprises, such as Sinda Capital Management and Oriental Capital Management, injected 21.868 billion yuan of capital into large vessel heavy industry and Wushui heavy industry through debt-to-equity swap and cash increase. The purchase of the two subsidiaries'equity is to repurchase the equity held by the above eight state-owned shareholders through debt-to-equity swaps. This year, China Shipping Heavy Industry (Qingdao) Rail Transit Equipment Co., Ltd. will also be injected into the listed companies, at the same time, through bankruptcy liquidation, liquidation of its non-performing assets.

As early as 2014, China Heavy Industries has been promoting mixed transformation and internal asset integration, and completed the acquisition of large ship heavy industry and Wushui heavy industry in that year.

Big Ship Heavy Industry and Wuhan Ship Heavy Industry are heavily burdened with debts. Before the debt-to-equity swap and capital increase, the asset-liability ratio of the two industries is as high as 80% and 82%. Through debt-to-equity swap and capital increase, the debt ratio of related assets has been greatly reduced, which has gradually cleared the obstacles for restructuring at the group level. On March 29 this year, China Shipping Group put Jiangnan Shipbuilding, Guangzhou Shipbuilding International, Huangpu Wenchong and other shipbuilding assets into Chinese ships, and Shanghai East Heavy Engine, China Shipping Power Research Institute, China Shipping Three Well Shipbuilding Diesel Engine and other marine power assets into China Shipping Defense. In addition, much attention has been paid to the high-level exchange of North-South vessels in 2017. Hu Wenming, who was transferred from South Ship to North Ship as chairman, and Dong Qiang, who was transferred from North Ship to South Ship, have rich experience in business and capital operation. Last March, Lei Fanpei, chairman of China Aerospace Science and Technology Group, succeeded Dong Qiang as chairman of Nanchuan.

Organizations predicted that if the North-South ship merged in the future, the North Ship would probably become the dominant party, because the market value of China Heavy Industries, the listed platform of the North Ship, was bigger and the income scale was higher. From the point of view of China Shipping Group, future investment opportunities may be mainly reflected in acquisitions, such as the integration and acquisition of civil ship assembly assets by China Shipping Defense. Earlier, it was reported that Chinese ships would probably revert to the power equipment sector and integrate the group's medium-speed engine assets and diesel engine research and development assets. As the platform of China Shipping Group Army and Civil Assembly, China Shipping Defense