Shaanxi Construction Machinery Group is transferring a 21.0 per cent stake with a market value of CNY 5.28 billion (USD 760.11 million) in Shaanxi Construction Machinery (SCMC)to Shaanxi Coal and Chemical Industry.
The actual owner of the road roller to stabilised soil mixer company will still be Shaanxi’s State-owned Assets Supervision and Administration Commission.
However, Shaanxi Coal will become the immediate controlling shareholder, with a 27.9 per cent stake, following the free equity transfer.
SCMC closed 3.4 per cent higher yesterday at CNY 26.80 and a market capitalisation of CNY 25.91 billion as its stocks have more than trebled over the last 12 months from CNY 8.26 on 14th August 2019.
The company’s main products are road construction and general machinery suitable for basic municipal, bridge and high-rise projects, though it also leases equipment.
Demand is still strong due to the expansion of production capacity of original equipment manufacturers and the continuous introduction of new lines in the market in recent years.
While construction supply and demand has eased somewhat to bring prices back to normal levels, the large-tonnage tower cranes category has accelerated due to the development of prefabricated buildings.
SCMC’s revenue rose 46.0 per cent year-on-year to CNY 3.25 billion in the 12 months ended 31st December 2019, from CNY 2.23 billion in FY 2018.
Zephyr, the M&A database published by Bureau van Dijk, shows 162 deals targeting the global agriculture, construction and mining machinery manufacturing category have been announced in 2020 to date.
The largest of the year so far features Zoomlion Heavy Industry raising USD 934.02 million via a capital increase comprising the sale of a 13.7 per cent stake.
SCMC will be the category’s second-biggest of 2020 to date, according to Zephyr.
© Zephus Ltd