Resource assets are particularly favored by capital

The period of economic adjustment provides a good opportunity for mergers and acquisitions of enterprises. Resource assets are particularly favored by capital. This phenomenon is not only popular in the A-share market, but also in the Hong Kong stock market. In response to the proposed acquisition of Meijin Group in October last year, on May 6th, China Environmental Protection Energy announced that Beijing Huaxi Jinghao had signed a letter of intent with several shareholders of Jingding Julong Technology Services Group Co., Ltd. to purchase Crystal Ding Julong 51% stake.

This means that if the acquisition of Meijin Group is finally realized, China Environmental Energy will add more weight to the transformation of energy saving and environmental protection and mineral resources holding companies. On October 24 last year, China Environmental Protection Energy announced that it had entered into a memorandum of understanding with the relevant parties and intended to acquire the Meijin Group.

According to statistics, China Environmental Energy was established in 1993. Initially, the main business was mainly the production and sales of laminates and printed circuit boards. There has been no major ups and downs in its stocks, and this has completely changed with the acquisition of a mineral resource. The Meijin Group mainly involves industries including energy conversion and new energy development, development of energy-saving and environmental protection industries, and transformation of mineral energy.

It is understood that this time the United States and Jin Group's proposed acquisition of Jingding Julong in the development of mineral resources and energy, there are many high-quality assets. Jingding Julong was established in February 2, 2010 in Duolun County, Inner Mongolia. It is one of the largest companies in the region and covers mineral development, fluorosilicone chemical manufacturing and other industries. Its total assets are 3 billion yuan, and its 2012 profit is 350 million yuan. . Crystal Ding Julong's most famous is the Inner Mongolia Crystal Ding Julong Chemical Co., Ltd. The company's annual output of 60,000 tons of anhydrous hydrofluoric acid project was put into operation on September 16, 2011. The current output value is 500,000 yuan per day, and annual sales income is 180 million yuan.

It is reported that last year's global mining and metals industry's mergers and acquisitions activities are declining. The Ernst & Young report shows that in 2012, the global mining and metals industry completed a total of 941 transactions with a total value of US$104 billion, which is a decrease of 7% and 36% compared with 2011 respectively. Among them, there are 147 transactions in China with a total value of 21.7 billion U.S. dollars, accounting for 21% of the total global trade in the industry.

Yesterday, a person in the investment industry told the "International Financial News" reporter that a group of well-funded investors in Asian countries such as China, Japan, and South Korea are looking for cheap assets around the world and are looking for opportunities to buy bases. They are most interested in mineral resources. . Roger Suyama, head of investment research at investment bank VTBCapital, told the media that professional investors are pouring into this area based on the prospect that mineral resource prices are nearing the bottom.

Although industry insiders anticipate that mining M&A activity will increase, the possibility of large-scale transactions seems unlikely. "On the one hand, the short-term prospects of global economic growth and commodity prices are still unclear, making it difficult for the potential acquirer of the project to obtain sufficient financial support; on the other hand, there is a big difference in expectations for the pricing of mining assets between buyers and sellers. In stark contrast, the minority share purchases with transaction value ranging from US$500 million to US$600 million will be more favored by buyers and sellers,” said the above-mentioned source.

Paul Donnelly, head of investment banking at JPMorgan South East Asia’s minerals metals industry, said that investors in Asia will have access to iron ore, coal and other assets, and the acquisition of some equity is the most likely method. He explained that “under the current valuation environment, asset owners are less willing to sell their controlling stakes, but they still need to raise more funds for project promotion and development activities.”