The hottest large-scale mergers and acquisitions d

2022-08-12
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Large scale mergers and acquisitions draw attention to Zoomlion's convergence and fragmentation

large scale mergers and acquisitions draw attention to Zoomlion's convergence and fragmentation

China Construction machinery information

Guide: Zoomlion has made large-scale mergers and acquisitions in a row within a month, which has caused an uproar in China's machinery industry. However, due to many uncertainties in the serial mergers and acquisitions, its shares are still suspended, and the future trend of Zoomlion is of concern Our strength today and in the industry

Zoomlion made a series of large-scale mergers and acquisitions within a month, which caused an uproar in China's machinery industry. However, due to many uncertainties in the serial mergers and acquisitions, its shares are still suspended, and the future trend of Zoomlion is of concern

"there is no doubt about our strength and position in the industry today." Chen Xuhui, assistant to the chairman of Zoomlion (000157; full name "Hunan Changsha Zoomlion Heavy Industry Technology Co., Ltd.), proudly told the financial times

just one month ago, Zoomlion made several large-scale acquisitions, which caused an uproar in China's machinery industry

on March 25, Zoomlion acquired 100% equity of Shaanxi Xinhuang Industrial Machinery Co., Ltd. with 34million yuan; On April 3, Zoomlion wholly controlled Hunan Automobile Axle Factory; On April 8, Zoomlion announced its intention to acquire 100% equity of CIFA (compagnia Italiana forme acciaio S.p.A.); In mid April, the news that Zoomlion wanted to take over 51% of the equity of Huatai heavy industry also caused a storm

according to the annual report of Zoomlion, the operating revenue in 2007 was 8.973 billion yuan, an increase of 92.67% year-on-year; The net profit was 1.315 billion yuan, a year-on-year increase of 163.37%. The performance has achieved substantial growth

Zoomlion's main businesses include the production and sales of concrete machinery, cranes, pavement machinery and sanitation machinery, among which the lifting machinery and concrete machinery business are the main revenue at present. From 2005 to 2007, its profits doubled, reaching 31.3 billion yuan, 48.5 billion yuan and 136.4 billion yuan respectively, and quickly became the champion of domestic listed companies in the construction machinery industry, ranking 24th among global construction machinery manufacturers

the road to capital

Zoomlion is a typical enterprise born under the reform of scientific research institutions

in 1992, Zhan Chunxin, who was then the vice president of Changsha Construction Machinery Research Institute of the Ministry of construction (now Changsha Construction Machinery Research Institute Co., Ltd., hereinafter referred to as "Construction Machinery Institute"), with a starting capital of 500000 yuan and seven staff, established Changsha high tech Development Zone Zhonglian construction machinery industry company, which is the predecessor of Zoomlion Heavy Industry

like most similar enterprises, Zoomlion started from trade, but relying on its own scientific research advantages and capabilities, it developed and produced the first generation of concrete pump in 1993, with a profit of 3million yuan; In July, 1994, the second generation concrete pump was successfully developed on the basis of the first generation, and the profit suddenly reached 13million yuan

"to make the enterprise reach the ideal height, we must cater to the corresponding reform and constantly enrich the enterprise strength." Zhan Chunxin preached

in March, 1995, the former Changsha Construction Machinery Institute Zhongqi company was merged into Zoomlion, and Zoomlion Heavy Industry Co., Ltd. owned the construction hoisting machinery business; In October, 1996, Zoomlion obtained the qualification to produce a series of sweepers; In August, 1997, Zhonglian Concrete Machinery Co., Ltd. and Zhonglian hoisting Co., Ltd. were established

in July 1998, Zoomlion finally got on the last bus of listing and received the last quota of listed enterprises from the Ministry of construction. After two years of planning, it finally landed on the Shenzhen Stock Exchange on October 12, 2000

from a wholly state-owned company to a state-owned holding company, Zoomlion was jointly invested by Hunan state owned Assets Management Commission, Hunan Land Capital Management Co., Ltd. and Changsha Yifang science and Technology Investment Co., Ltd. with more than 900million yuan, holding 91.8%, 2.3% and 5.9% respectively. It issued 50million A-share shares and raised nearly 600million yuan

"two brands, one set of people." Zhan Chunxin is also distressed by the long-term unclear equity of Zoomlion and China Construction Machinery Institute. In 2006, the Construction Machinery Institute implemented the "major shareholder" restructuring, and several shareholders increased their capital again on the basis of the original capital injection of more than 900million yuan. Among them, the state owned assets supervision and Administration Commission of Hunan Provincial People's Government contributed 359.9568 million yuan, holding 59.7% shares; Changsha Hesheng Technology Investment Co., Ltd. invested 108.7659 million yuan, holding 18.04% shares; Changsha Yifang Technology Investment Co., Ltd. invested 72.0972 million yuan, which has an absolute advantage over other materials; Secondly, the shareholding is 11.96%; Zhizhen International Co., Ltd. contributed 48.2332 million yuan, holding 8% of the shares; Hunan Land Capital Management Co., Ltd. invested 13.862 million yuan, holding 2.30% of the shares

after clarifying the relationship, Zoomlion achieved a new equity structure

"nuclear fission" strategy

on December 21, 2002, Zoomlion merged Hunan Machine Tool Plant through debt, marking the first step of the enterprise's low-cost expansion strategy. With the successful completion of the acquisition of land, equipment and related assets of Puyuan group, Zoomlion has also officially embarked on a key step of the "acquisition" strategy

on August 30, 2003, Zoomlion invested 6.963 million yuan to acquire Puyuan group; On September 23 of the same year, it acquired all the operating assets of the bid winning industry separated from the company. On December 18, 2004, Zoomlion bus company, a subsidiary of Zoomlion group, was established

"in order to realize product diversification and market internationalization, Zoomlion has chosen strategic means such as its own capacity expansion, overseas location, mergers and acquisitions, among which mergers and acquisitions are the most favorable shortcut to achieve rapid expansion." Hu Limei, an analyst of Shenyin Wanguo machinery and equipment, said to

In 2005, Zhan Chunxin formally put forward the strategic idea of "nuclear fission", that is, to implement the strategic idea of "specialization, shareholding and internationalization" with "fission in the middle of the industrial chain and extension up and down" as the core. On November 17, 2005, Zoomlion raised 76.9612 million yuan to acquire the operating assets of the truck crane related parts of the Research Institute of Hunan Puyuan Construction Machinery Co., Ltd., which produces less than 25 tons and has five laboratories

since 2007, Zoomlion's "nuclear fission" strategy has accelerated significantly

spend more than 215000 yuan to acquire the land, equipment, buildings and equity of Changsha commercial bank owned by Changsha Construction Machinery Research Institute Co., Ltd; Invest more than 1046000 yuan to acquire the vehicles, equipment and other assets of Hunan Puyuan Group Co., Ltd; It spent more than 1284000 yuan to acquire the land, buildings, equipment, Bank of communications shares and other assets of Hunan Puyuan Construction Machinery Co., Ltd

on March 25th, 2008, Zoomlion successfully acquired 100% equity of Shaanxi xinhuanggong machinery with 34million yuan, and continued to increase capital by 190million yuan to improve xinhuanggong's debt structure and resume normal production. On April 3, Zoomlion successfully participated in the restructuring of Hunan Automobile Axle Factory, successfully controlled the new automobile axle enterprise, and plans to inject 300 million to 500 million yuan of funds in the next three years for the upgrading of the axle production line

on April 8, Zoomlion and Hony capital of Lenovo successfully acquired the Italian construction machinery manufacturing company CIFA (compagnia Italiana forme acciaio S.p.A.). CIFA company is the third largest company in the concrete machinery industry in the world. It is relatively high-end in terms of technology and brand. The acquisition of CIFA company is in line with Zoomlion's internationalization strategy and is conducive to its expansion of overseas markets. Zoomlion hopes to open up the European market through mergers and acquisitions and accelerate its expansion to enter the global top 10

the "major shareholder" of the Construction Machinery Institute has successfully restructured, and Zoomlion's "acquisition war" has been won frequently, and its turnover performance has increased all the way. The report shows that the non operating income in 2007 increased by 991.12% over the same period, mainly due to the acquisition of part of the equity of Teli hydraulic, structure No. 2 factory, Zhongwang Company, Zhongchen company and Puyuan Shanghai Branch

for a series of acquisitions, Zhu Xuedong, an analyst at industrial securities, said he was optimistic that China's various polyurethane raw materials were technologically advanced and the output was leading. He predicted: "the demand for concrete machinery will increase by 18% - 20% in the next few years. If the export rate remains above 40%, the sales volume of China's concrete machinery industry will increase by 20% - 30%

"grasp with both hands, and be hard with both hands." While aiming at the domestic market, Zoomlion will not miss the foreign market. "The acquisition of Italian enterprises is the acceleration of Zoomlion's global market." Hu Limei, an analyst of Shenyin Wanguo machinery and equipment, said to

"whether Zoomlion's' nuclear fission 'strategy can successfully achieve the expected goals is related to the future destiny of the company, and in fact, it is also a new barrier we are currently facing." Zhan Chunxin said with worry

Zoomlion hopes to rapidly expand its main business to earth moving machinery, pavement machinery and other fields. However, self expansion also needs to meet certain objective factors of the market. For Zoomlion, the benefits and risks of serial acquisitions coexist

"convergence and split" confusion

"China will become the first in five years and enter the top ten international construction machinery enterprises in ten years." In 2008, Zoomlion set the operating revenue target at 11.22 billion yuan and the net profit target at 1.608 billion yuan

due to serial mergers and acquisitions, the trading of Zoomlion shares is still suspended from April 9. The competitiveness and stock price trend after mergers and acquisitions have become the most concerned hot spots in the market

according to the analysis of insiders, the steel price, macroeconomic regulation and financial risks faced by Zoomlion in the acquisition process will be the main confusion at present

the rising price of raw material steel leads to high product costs, which will lead to a general decline in the profits of the construction machinery industry this year. As China depends on a large amount of foreign iron ore, the rise in the price of iron ore will inevitably lead to the rise in the price of steel raw materials. It is expected that the production cost of construction machinery will rise by an average of 2% to 3% this year

in addition, due to the economic recession in the United States and Europe caused by the subprime mortgage crisis, the export of construction machinery was directly affected. Data show that Zoomlion only created an export volume of less than 1billion yuan in 2007

in this regard, Hu Limei affirmed the above risks of Zoomlion, and understood this risk as short-term. She also believes that the long-term risks of Zoomlion mainly come from the future competition in the construction machinery industry. She said, "after the rapid development in the early stage, the competition in the industry tends to be fierce, and the overall gross profit level of the whole industry will be lower and lower in the process of competition."

facing the problems that the level of supplier management and supporting management still needs to be improved, Zhan Chunxin, who is good at "M & a" strategy, also said: "enterprises need time to precipitate."

as dongyaguang, an analyst at Guojin securities, said, Zoomlion represents another upgrade of strategic "nuclear fission" in the series of acquisitions of powerful enterprises, but it remains to be seen whether the company can effectively integrate and achieve "1+1 2" in the future

Zhan Chunxin's "static" and "dynamic"

has changed from a wholly state-owned company to a state-owned holding company, and today, with a series of large-scale acquisitions, Zoomlion's development can be described as twists and turns. Zhan Chunxin, the "director" behind it, also shows some elusive mystery

In 1979, Zhan Chunxin, who had stayed in Northwestern University for two years, gave up his "iron rice bowl" and returned to Hunan to plunge into the humble Changsha Construction Machinery Research Institute as a small technical researcher

in the early 1990s, the reform of the system of Chinese scientific research institutes and the research of "eating the imperial grain"

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