Textile Industry Mergers And Acquisitions Integration Pformation Will Usher In A New Peak

As the "roadmap for state-owned enterprise reform" is becoming more and more clear, there is another "reform craze" in various industries, and the development of mixed ownership economy is the key to deepening the reform of state-owned enterprises.

The industry is still facing the test of fundamental improvement in 2014. The reform of state-owned enterprises in full swing will enhance the profitability of state-owned assets in the short term. In the long run, the merger and reorganization and pformation of textile industry will usher in a new peak. This strong reform will greatly enhance the value of these enterprises.

As the "roadmap for state-owned enterprise reform" is becoming more and more clear, there is another "reform craze" in various industries, and the development of mixed ownership economy is the key to deepening the reform of state-owned enterprises.

For the textile industry itself

Competition is relatively high, but due to historical problems, state-owned textile enterprises everywhere are facing reform challenges.

According to statistics, there are 16 central enterprises and local state-owned enterprises in the listed companies of the textile industry. The total market value of state-owned enterprises occupies the entire textile industry.

The total market value of the plate is about 16%.

From the perspective of the sub sectors, the enterprises in the background of state-owned enterprises are mainly concentrated in processing and manufacturing sectors, including 6 cotton spinning companies, 2 wool textile companies, and 4 garment and garment manufacturing companies.

Although most of these textile enterprises perform well in the capital market and have abundant resources, their operating efficiency is declining.

Among them, apart from the enterprises belonging to the China military group (601718), which belong to the military industry, the other 15 companies are generally competitive enterprises. There are widespread malpractices in the enterprise system, industrial chain is not smooth, performance loss, and even ST risk exists.

Similarly, this dynamic reform will greatly enhance the value of these enterprises.

Shooting the first shot

Shanghai first grasps "good platform"

In this round of reform of state-owned assets, Shanghai, because of its financial center status and the huge volume and assets owned by state-owned enterprises, has fired the "first shot" of the reform of state-owned assets.

In December 17, 2013, Shanghai deepened the reform of state-owned assets and promoted the development of enterprises. The working conference formally promulgated the opinions on further deepening the reform of state owned assets in Shanghai and promoting the development of enterprises.

According to the planning of Shanghai SASAC, this year will focus on the industrial chain, value chain and functional chain, strengthen vertical integration and horizontal linkage, promote the diversification of property rights of competitive enterprises, introduce competitive business of functional and public service enterprises into strategic investors, and explore franchising in the public service industry.

Shanghai is the most concentrated area of state-owned textile enterprises. There are 4 listed companies, namely, Sanmao (600689), leading shares (600630), Shenda shares (600626) and industrial enterprises (600272) in Shanghai.

In fact, the reform movement has already started.

By the end of 2013, conch apparel, a wholly owned subsidiary of the leading stock company, intends to replace the 100% stake in the Ma Lu shirt factory and the 100% stake held by the Shenda group.

Leading shares and Shenda shares are listed companies held by Shanghai textile (Group) Co., Ltd., and this asset replacement has also opened the prelude to the adjustment of Shanghai's textile state-owned enterprises.

According to Shanghai SASAC related personages, Shanghai textile will make good use of Shenda's "good platform" when formulating the group reform plan, so as to develop mixed ownership.

Top level design

Giving full play to the pioneering role of capital

Under the guidance of national macro level, "enterprises change from managing people to managing capital" and "pforming single ownership into mixed ownership", the reform situation is not the same everywhere.

Taking Shenzhen as an example, the core idea of its reform is "Refocusing", that is, stripping off non main business and solving competition in the same industry, highlighting the main business of the group company, integrating the main business of a certain field into a leading enterprise and forming the sole listed group in a single industry.

As the pioneer of state-owned assets reform in Shenzhen, Shenzhen Investment Holdings Company Limited (hereinafter referred to as "Shenzhen investment control") is a state-owned asset management company, which focuses on property rights management, capital operation and investment and financing business.

In March 17th, Shenzhen Investment Holdings Company Limited intends to pfer shares of Shenzhen textile A (000045) 26%~29%. According to the announcement, Shenzhen's controlling share in the pfer is no less than 132 million shares and not higher than 147 million shares, and the pfer price is no less than the weighted average price of the first 30 trading days.

And Shenzhen state assets, "one step out" approach is different, Hunan SASAC seize the pformation and upgrading of enterprises.

Hua Sheng shares (600156), due to the poor performance of the main textile business for many years, under the guidance of the actual controller of the Hunan provincial SASAC, Hunan Huasheng Group, the largest shareholder of Huasheng Group, replaced the assets of the listed companies by the end of 2012, and placed 51% stake in the Hunan pharmaceutical exchange, pforming the high-end pharmaceutical equipment industry from the traditional textile industry.

As a result, the loss of 26 million 410 thousand yuan in the interim period of Huasheng shares (600156) achieved year-round performance counter attack.

The company announced the announcement of the 2013 annual earnings increase in the evening of January 27th. It is estimated that the net profit attributable to shareholders of Listed Companies in 2013 will increase by 1570%~2050% compared with the same period last year.

Clarifying the objectives of reform

Finding the main theme of investment

From the perspective of the reform of state-owned textile enterprises, through restructuring and merging or asset injection, introducing strategic investors, withdrawal of state capital, management and employee equity incentives, the state-owned equity movement will be promoted, giving full play to the advantages of state-owned assets, making state-owned enterprises face directly the competition with private enterprises and giving full play to their own initiative and creativity.

As for the capital market, there are two main lines of investment in the theme of state-owned enterprise reform: first, the re discovery of platform value of listed companies of state-owned enterprises. Under the premise of specialized reorganization and market-oriented operation, assets that are profitable and growing well will be listed or injected into listed companies separately, while stripping other businesses of non major businesses of listed companies will have a positive impact on the improvement of the market value and the function of financing, so as to realize the preservation and appreciation of state-owned assets.

The two is the upgrading of state-owned enterprises from "big" to "strong".

We should promote the pformation of mature industries leading enterprises to strategic emerging industries, encourage state-owned enterprises to "go out" actively and accelerate the development of state-owned pnational corporations with strong international competitiveness.

But Chen Qingtai, member of the Standing Committee of the CPPCC National Committee, deputy director of the Economic Committee and President of China Association of listed companies, pointed out that rushing to operate in the absence of clear institutional framework may create obstacles for subsequent reforms.

We should first clarify the objectives of reform, the system and mechanism to be established, design feasible plans, properly handle historical problems, conduct the necessary pilot projects, and then conduct large-scale actions to ensure that the reform is carried out actively and safely.

In 2014, the textile industry is still facing the test of fundamental improvement. The reform of state-owned enterprises, which is in full swing, will enhance the profitability of state-owned assets in the short term. In the long run, the merger and reorganization and pformation of textile industry will usher in a new peak.