The restructuring plan of Wall Nuclear Materials (002130, previous closing price of 9.74 yuan) was released today. The company plans to purchase 100% equity of five companies under Leting Wire engaged in the consumer electronics cable business for 273 million yuan. Wall Nuclear Materials said that through this acquisition, the company can acquire the famous cable brand "LTK" and accelerate the development of wire and cable business.
273 million acquisition of Leting Cable Business
Wohl Nuclear Materials announced today that the company plans to acquire US$43.28 million (approximately 273 million yuan) through its wholly-owned subsidiary Woll Trading RMB) in cash to acquire 100% of the equity of Huizhou No. 1 Company, Huizhou No. 2 Company, Chongqing Leting, Dalian Leting and Leting International held by Leting Wire. As of June 30, the target company's unaudited consolidated statement net assets were 293 million yuan, and the transaction price was discounted by approximately 20 million yuan.
The "Daily Economic News" reporter noticed that the first four companies mentioned above are mainly engaged in the consumer electronics cable business, and their main customers are consumer electronics manufacturers. The main business of Leting International is trading, and it is mainly responsible for the external procurement and sales of the aforementioned company's wire and cable business. In 2009, Leting International's market share in the global consumer electronics cable market was 16.9%, ranking second.
Information shows that Leting Wire was founded in 1981. It is a wholly-owned subsidiary of Belden, a company listed on the New York Stock Exchange, and is the first cable manufacturer in the world to obtain UL and RoHS green certifications. The company has three major businesses: consumer electronics cables, non-consumer electronics cables and trading. After selling the above-mentioned company shares to Wall Nuclear Materials, Leting Wire still owns Suzhou Leting, which is engaged in the non-consumer electronics cable business, and Belton Hersman, which is engaged in the trading business.
Wall Nuclear Materials stated that the company subject to the transaction owns the "LTK" brand, which has a high reputation in the industry. At the same time, the target company's customer resources are relatively stable, and Huawei Technologies has been the company's largest customer in recent years. In addition, the subject company has advanced technology and is one of the few domestic manufacturers capable of producing AWG44 specification cables. Its related products comply with the US UL certification standards, the EU RoHS directive and Reach standards, and meet the environmental protection requirements for product exports. Through this transaction, the company can acquire well-known brands, acquire cable customer resources, and accelerate the development of the company's wire business.
The operation of the target company is worrying
However, judging from the announcement, the operation of the above-mentioned target company has not been very optimistic in recent years, and Wall Nuclear Materials may face the situation of "drag" on its operating performance. .
In 2010, 2011 and January to June 2012, the unaudited consolidated operating income of these five target companies was 1.075 billion yuan, 1.047 billion yuan and 438 million yuan respectively, achieving net profits 7.197 million yuan, -40.147 million yuan and -14.7702 million yuan respectively. Among them, the operating conditions of Huizhou No. 2 Company are slightly better. The company achieved net profits of 19.8569 million yuan and 15.6571 million yuan in 2010 and 2011 respectively. The net profit in the first half of this year was 4.9089 million yuan. In addition, the other four companies have all been in the red this year. Leting International alone lost 8.5072 million yuan from January to June this year, accounting for half of the loss.
Wall Nuclear Materials said that because the target company’s operation and management are subject to Belden’s globalization strategy and overseas management model, the growth of operating income has basically stagnated, while operating costs and expenses have remained at a high level. At the same time, the target company needs to allocate more than 20 million yuan in management expenses to Belden Asia headquarters every year. These reasons all led to its poor operating performance. After the completion of this acquisition, the company will adjust the operation and management strategies of these companies, expand the domestic market, control operating costs and expenses, and achieve an improvement in their operating performance as soon as possible.
It is worth mentioning that since the asset-liability ratio of the target company is 70%, this acquisition will significantly increase the asset-liability ratio of Wall Nuclear Materials from 26% to 45%. As of June 30, Wall Nuclear Materials' monetary capital was 191 million yuan, and the company still had a gap of tens of millions of yuan in acquisition funds, which required the company to solve it through refinancing.