Two giants with market caps of hundreds of billions resume trading, the 'China Shipbuilding Group' is about to emerge!
On September 19, $CSSC Holdings(600150.SH) and $ CSICL.CN , two shipbuilding giants with market capitalizations in the hundreds of billions, officially resumed trading.
Among them, China CSSC Holdings Limited opened significantly higher by over 7%, then fluctuated and adjusted. As of the time of writing, the company's stock rose 1.72% to 35.5 yuan per share, with a market capitalization of 158.8 billion yuan. Meanwhile, China Shipbuilding Industry Company Limited performed relatively weaker, currently down 2.81% at 4.84 yuan per share, with a market capitalization of 110.4 billion yuan.
Earlier in early September, China CSSC Holdings Limited announced plans to merge with China Shipbuilding Industry Company Limited by issuing A-shares to all shareholders of the latter.
On September 18, the restructuring plan was released. China CSSC Holdings Limited announced that the share exchange price was set at 37.84 yuan per share, based on the average stock price over the 120 trading days prior to the pricing benchmark date. China Shipbuilding Industry Company Limited's average stock price was set at 5.05 yuan per share. The exchange ratio was 1:0.1335, meaning each share of China Shipbuilding Industry Company Limited could be exchanged for 0.1335 shares of China CSSC Holdings Limited.
Notably, to protect the interests of dissenting shareholders from both companies, the transaction granted China CSSC Holdings Limited and China Shipbuilding Industry Company Limited dissenting shareholders the right to sell their shares. The buyout price for China CSSC Holdings Limited dissenting shareholders was set at 30.27 yuan per share, while China Shipbuilding Industry Company Limited's was 4.04 yuan per share, both approximately 80% of the exchange price.
This move provides dissenting shareholders with a cash exit option, fully considering the interests of minority shareholders.
This merger could become the largest absorption merger in the history of A-share listed companies, with a total transaction value of 115.1 billion yuan. After the merger, China Shipbuilding Industry Company Limited will delist and dissolve its legal entity. The surviving company's controlling shareholder will remain China State Shipbuilding Corporation Limited, and the actual controller will still be China State Shipbuilding Corporation, with no changes.
"China's Shipbuilding Giant" is about to be born, and the massive vessel is ready to set sail.
On September 19, the two giants officially resumed trading, but their stock performance fell short of expectations. Some fund managers noted that the overall market is sluggish, with poor returns, making it difficult for hundred-billion giants to rally. Additionally, China CSSC Holdings Limited and China Shipbuilding Industry Company Limited had seen significant gains earlier, leading to short-term profit-taking.
However, in the long run, this merger is expected to resolve internal competition within China State Shipbuilding Corporation, enhance overall shipbuilding capabilities and supply chain management, and further boost China's global influence in shipbuilding.
AVIC Securities also believes that the "Two-Ship Merger" can be seen as a reconsolidation of China's major military shipbuilding capabilities, effectively strengthening the country's defense industrial base in maritime fields and supporting future military ship construction.
Furthermore, in recent years, global shipping demand has steadily grown, with a notable uptick in market conditions, marking the start of a recovery cycle for the shipbuilding industry. As of the end of June 2024, the Clarkson Newbuild Price Index rose to 187.2 points, up 9.5% year-on-year. Global ship orders reached 291.26 million deadweight tons, the highest since 2016.
The industry widely believes that global shipbuilding is entering a new upward cycle, with major shipyards' order books filled until 2028. Shenwan Hongyuan Research also predicts that this upward cycle could last over 10 years.
Against this backdrop, China CSSC Holdings Limited and China Shipbuilding Industry Company Limited are setting sail with the cycle, advancing asset restructuring to build world-class shipbuilding enterprises, with promising future potential.
Driven by this benchmark effect, A-share state-owned enterprise reform stocks are performing actively.
As of September 19, CETC Chip (600877.SH), CCCC Real Estate (000736.SZ), Datang Telecom (600198.SH), Baobian Electric (600550.SH), and Jiugui Liquor (000799.SZ) rose by the 10% daily limit. China Jushi (600176.SH), Shenzhen SED (000032.SZ), Jinxi Axle (600495.SH), Yueyang Forest & Paper (600963.SH), and Aerosun Corporation (600501.SH) also posted strong gains.
Author: Feiyu
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