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Zoomlion and Yingfeng environment "share exchange" transaction helps maximize shareholder value

Zoomlion and Yingfeng environment "share exchange" transaction helps maximize shareholder value

China Construction Machinery Information

, It was announced that the company and Yingfeng Environmental Technology Group Co., Ltd. (hereinafter referred to as "Yingfeng environment", securities code:) signed the agreement on issuing shares to purchase assets and the profit compensation agreement on the same day, and Yingfeng environment would issue shares to purchase the 20% equity of Changsha Zoomlion Environmental Industry Co., Ltd. held by Zoomlion

according to the agreement on issuing shares to purchase assets, the consideration for this transaction is 3.05 billion yuan, and Yingfeng environment will issue 3.5 billion yuan to Zoomlion As payment consideration (corresponding to the issue price of Yingfeng environment is 7.64 yuan/share), 100 million shares of tensile test of steel bar electroslag pressure welding head were purchased from the 20% equity of environmental industry company held by Zoomlion. After the completion of the transaction, Zoomlion no longer directly holds the equity of Changsha Zoomlion Environmental Industry Co., Ltd., but instead holds 12.62% equity of Ying1 general PVC plastic layer in quench peak environment

according to the announcement, after holding the equity of Yingfeng environment, the company will continue to benefit from the future development of the environmental industry company and the equity appreciation brought by the original business development of Yingfeng environment. At the same time, it also greatly increases the liquidity of this part of the shares and helps to maximize the shareholder value of Zoomlion

in addition, this transaction injected the environmental industry company into Yingfeng environment as a whole, completed the docking with the capital market, widened the future financing channels of the environmental industry company, optimized the equity incentive mode of the environmental industry company's management team, and provided a development platform for the environmental industry company to further strengthen and expand

the announcement indicates that the transaction will enhance the asset liquidity and asset quality of Zoomlion. Based on the prediction of the environmental industry company in this transaction that the cumulative net profit in 2018, 2019 and 2020 will not be less than 3.722 billion yuan, the profitability of Zoomlion, which is indirectly held, will be significantly improved

it is understood that this transaction is another way to control the accuracy of Zoomlion to improve its profitability and maximize shareholders' value, compared with yesterday's price increase of 10 yuan/ton; 62% of the CIF price of fine ore in Australia is 56.5 US dollars/ton. On may21,2017, Zoomlion announced that it would transfer 80% of the equity of its wholly-owned subsidiary Changsha Zoomlion Environmental Industry Co., Ltd. to Yingfeng Investment Holding Group Co., Ltd. and other four investment enterprises for RMB 11.6 billion. Zoomlion's main business thus focuses on the two major equipment manufacturing sectors of construction machinery and agricultural machinery. In the past year, Zoomlion has focused on its core business, strengthened engineering machinery and optimized agricultural machinery, achieved quality improvement and upgrading of the two business segments through "making up for weaknesses and going global", and achieved substantial growth in revenue. In the first quarter of 2018, the company's net profit was 377million yuan, an increase of 345.51% year-on-year. The market share of many key products ranked first in the industry

insiders believe that this transaction is actually a share exchange. After the share exchange, the liquidity of the shares has been greatly enhanced. Zoomlion's original shares in the environmental industry were not traded in the open market. Now it can be listed on the Shenzhen stock exchange through the share exchange, which helps to maximize the shareholder value. On the other hand, it is also conducive to the development of existing businesses of Zoomlion environment and Yingfeng environment. Zoomlion can enjoy the equity appreciation brought by the development of these two aspects. Therefore, Zoomlion and its shareholders will gain more direct and indirect benefits

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