3.8 billion acquisition of loss of aluminum assets Shenhuo shares gamble industry inflection point?

According to the Daily Economic News report on June 21, an acquisition announcement announced today by Shenhuo (000933), which saw a noticeable decline in its first quarter results, has caused many investors to worry.

Shenhuo shares involved in Shenhuo Aluminum from the end of 2007, only tasted the sweetness of less than a year, since then, alumina prices plummeted in 2008, resulting in Shenhuo Aluminum's business has been in a state of loss in recent years. The company now announced that it will receive the remaining 30.62% stake from Shenhuo Group, the major shareholder, for 383 million yuan, and will therefore own 100% of Shenhuo Aluminum.

For the acquisition, Shenhuo shares itself is also lack of emboldened, saying that the profit prospects of the electrolytic aluminum industry also depends on the country's policy orientation to the entire industry. According to industry sources, Shenhuo shares continue to overweight the electrolytic aluminum industry, perhaps waiting for the arrival of the industry in the spring. 3.8 Billion won the remaining shares of Shenhuo Aluminum Co., Ltd. Shenhuo today announced that on June 17, 2011, the company and Henan Shenhuo Group signed the “Agreement on the Transfer of 30.62% Equity of Henan Shenhuo Aluminum Co., Ltd.” held by Henan Shenhuo Group, and the transaction price was 383 million yuan. yuan. After the equity transfer, the company will hold 100% equity of Shenhuo Aluminum.

According to the announcement, in 2010, Shenhuo Aluminum (consolidated statement) realized operating revenue of RMB 4.560 billion and net profit of the parent company owner of RMB 3.05 billion. From January to May 2011, Shenhuo Aluminum achieved an operating income of RMB 3.136 billion and a net profit attributable to the parent company owner of approximately RMB 262 million. The appraised value of the total equity of the shareholders of Shenhuo Aluminum Company determined using the cost method was RMB 1.250 billion, which represented an impairment of the book value of net assets of RMB 199 million, and the impairment rate was 13.71%.

This acquisition is the third time that Shenhuo has increased its stake in Shenhuo Aluminum since acquiring Shenwu Aluminum in September 2007 for the first time.

On September 9, 2007, Shenhuo Capital increased the capital of Shenhu Aluminum by 1.06 billion yuan in kind and cash, and held a 45.05% stake in Shenhuo Aluminum, making it a controlling subsidiary of the company. Since then, in July 2008, Shenhuo shares continued to invest 578 million yuan in holdings of Shenhuo Aluminum, after the completion of its 69.38% stake.

Because in October 2008, under the influence of the global economic crisis, non-ferrous metal prices have plummeted, and of course, alumina is not immune. Overweight expectation performance turning point? Since Shenhuo’s acquisition of Shenhuo Aluminum’s equity, it only brought better net profit contribution to the company before the third quarter of 2008 because alumina prices were still high at the time, but since then the raw material cost was high and the alumina price was upside down. As a result, Shenhuo Aluminum's performance has been at a loss.

According to the 2008 annual report of Shenhuo, the aluminum and aluminum products business revenue was 7.325 billion yuan, the profit rate was only 3.28%, the operating cost increased by 42.10% year-on-year, and profitability began to decline sharply; The interest rate was -7.96%. Although the annual profit was 5.4%, the net profit turned from loss to profit. By 2010, the performance continued to decline sharply. In that year, the company suffered a loss of 305 million yuan, and there was no loss in the first five months of this year. Small trend.

Analysts in the industry revealed that the costs incurred by Shenhuo Aluminum in restarting the electrolytic cell were another important reason for the lower-than-expected 2011 results. Currently, the electricity price is 0.57 yuan including tax price, t aluminum consumption 13900 degrees, plus the excess capacity of electrolytic aluminum. It is difficult for the company to make profits. It is expected that electrolytic aluminum 17400 ~ 17500 yuan / t is the company's break-even point. Only 30% of the company's self-provided power is expected. After the 600MW unit is put into production in the fourth quarter, the company's own rate will increase to 80%, and its own power generation cost will be 0.35 yuan, which will relieve the company's cost pressures.

Shenhuo Stock Co., Ltd. also appears to have a lack of confidence in the acquisition, saying that the electrolytic aluminum industry engaged in Shenhuo Aluminum Industry is relatively cyclical, and the market volatility is relatively large. The company's alumina resources control capacity is insufficient, the self-supply ratio is low, and the price of alumina increases. The increase in electricity prices will reduce the company's profitability. At the same time, due to the high energy consumption and relative overcapacity of electrolytic aluminum, the electrolytic aluminum industry has always been one of the key industries of the country’s macroeconomic regulation. The future policy orientation of the country’s electrolytic aluminum industry will result in the development prospects and overall profitability of the company in this industry. Certainly affected.