In recent years, the performance of Kingfa Technology (600143) has continued to increase significantly, and it has begun to seek profit growth points upstream of the industrial chain.
Intended to acquire 51.09% equity of Bora New Materials
Kingfa Technology announced on the evening of July 25 that the company intends to cooperate with Liaoning Baolai Enterprise Group Co., Ltd. (hereinafter referred to as “Baolai Group”), Panjin Xinhai Construction Engineering Co., Ltd. (hereinafter referred to as “Panjin Xinhai”) and Liaoning Baolai New Materials Co., Ltd. (Hereinafter referred to as “Baolai New Materials”) Signed the “Agreement on the Assignment of Capital Contribution Rights and Capital Increase of Liaoning Bora New Materials Co., Ltd. between Kingfa Technology Co., Ltd., Liaoning Bora Enterprise Group Co., Ltd. and Panjin Xinhai Construction Engineering Co., Ltd.”.
Bora New Materials was initiated and funded by Bora Group on January 20, 2020. As of the signing of this agreement, the registered capital of Bora New Materials was 3.21 billion yuan, of which Bora Group had subscribed to a registered capital of 2.91 billion yuan, with a subscribed ratio of 90.6542%; Panjin Xinhai subscribed a registered capital of 300 million yuan, with a subscribed ratio It is 9.3458%. Bora Group and Panjin Xinhai subscribe to 100% of the equity in total.
The original subscribed capital of Bora Group was 2.91 billion yuan, and the actual paid-in capital was 1.5 billion yuan. The Bora Group agreed to transfer the unpaid 1.41 billion yuan of its registered capital (accounting for 43.9252% of the registered capital of Bora New Materials) to Kingfa Technology. Kingfa Technology agrees to transfer the aforementioned rights to subscribe for capital contributions, and to pay capital contributions to Bora New Materials in accordance with the contract after the transfer. Panjin Xinhai waived the right of first refusal.
At the same time, Kingfa Technology agreed to increase the capital of Bora New Materials by 470 million yuan in accordance with the terms and conditions agreed in this agreement, and Bora Group and Panjin Xinhai waived the right to subscribe for the capital increase. After the capital increase, the registered capital of Bora New Materials increased from 3.21 billion yuan to 3.68 billion yuan. The capital contribution and equity ratio of each shareholder of Bora New Materials is 51.09% of Kingfa Technology, 40.76% of Bora Group, and 8.15% of Panjin Xinhai.
Bora Group was established in 2005 and its main business is petroleum refining, fine chemicals, logistics and warehousing, etc. In recent years, the Bora Group has strengthened its cooperation with domestic and international well-known enterprises. In December 2009, the Bora Group and Bank of China Group Investment Co., Ltd. formally cooperated; in February 2020, the Bora Group and CNOOC’s subsidiary Yingkou Asphalt cooperated to establish a joint venture; in August 2020, the Bora Group and the world petrochemical giant Lyondell Basel Industrial The company established a joint venture Polaris Basel Petrochemical Co., Ltd. to invest in the construction of 1 million tons/year ethylene steam cracking, 450,000 tons/year LLDPE, 350,000 tons/year HDPE, 400,000 tons/year PP1, 200,000 tons/year PP2 , 360,000 tons/year styrene, 120,000 tons/year butadiene extraction and other production equipment and supporting public works and auxiliary facilities.
Panjin Xinhai is 100% owned by the State-owned Assets Supervision and Administration Office of Panjin Liaodong Bay New Area. From 2018 to 2020, Panjin Xinhai will mainly engage in engineering contracting, asset management and financing services. In terms of engineering contracting business, Panjin Xinhai contracted the maintenance and renovation project of the Yudai Mingzhu Community in the Liaodong Bay New Area, and the maintenance project of the dormitory building of Panjin Xinchengye Group. In terms of asset management business, Panjin Xinhai managed Panjin Liaodong Bay Fengyuan Thermal Power Co., Ltd. and undertook the claims of Heyun Group in China Guangfa Bank and Panjin Bank, and invested in Liaoning Dawa Rural Commercial Bank Co., Ltd. Liaoning Xinggang Logistics Industry Development Co., Ltd. In terms of financing services, Panjin Xinhai mainly carried out the construction of financing tools such as guarantee lines, factoring lines, and leveraged notes, and established Shenyang Zehongtu Commercial Factoring Co., Ltd. to actively develop supply chain financing services around core enterprises.
Enter the upstream raw material industry such as ABS
Public information shows that Kingfa Technology‘s products are based on independent innovation and development, covering five categories of independent intellectual property products including modified plastics, fully biodegradable plastics, high-performance carbon fiber and composite materials, special engineering plastics and environmentally friendly high-performance recycled plastics.
According to the announcement, Bora New Materials was established in January 2020, and its business scope includes the sales of ABS resin, polyethylene, polypropylene, and polystyrene; the import and export of goods and technologies. (Projects that are subject to approval in accordance with the law can be operated only after being approved by the relevant departments.)
Bora New Materials is building a project with an annual output of 600,000 tons of ABS and its supporting equipment. The land for the project has been processed for the real estate ownership certificate and construction land planning permit in accordance with the law. The project construction has been processed in accordance with the law for construction project planning permission, enterprise investment project filing, environmental impact assessment, Approval procedures for construction project safety conditions review, energy conservation assessment review, etc. The total investment (excluding value-added tax) of the project is 10.687 billion yuan, of which 10.259 billion yuan is construction investment (excluding value-added tax). The project started construction on June 15, 2020, with a planned construction period of 2 years. The construction content of the project includes 600,000 tons/year ABS device, 600,000 tons/year propane dehydrogenation (PDH) device, 260,000 tons/year acrylonitrile (AN) device, 100,000 tons/year methyl methacrylate (MMA) Installation and supporting projects.
According to the project “Feasibility Study Report” prepared by the Jilin Design Institute of CNPC Northeast Refining and Chemical Engineering Co., Ltd., my country’s ABS resin has been in short supply for a long time. In 2019, the apparent consumption of ABS resin exceeded 6.05 million tons, and the self-sufficiency rate of production capacity was about 67%. Imports of ABS resin from Taiwan and South Korea exceed 2 million tons per year. It is estimated that the apparent consumption of ABS resin in 2030 is 7.9 million tons, and it is still necessary to import 1 million tons of ABS resin per year. According to the project design plan, the ABS, acrylonitrile, and MMA devices of the project adopt domestic advanced technologies such as PetroChina, and the PDH device adopts American Lummus technology. The production process of the ABS emulsion graft-body SAN blending method is relatively flexible. Through the improvement of local process technology and the optimization of the process formula, the production capacity and quality of the entire device can be upgraded. In terms of raw material supply, the main raw materials of this project, styrene and butadiene, are planned to be supplied by the “partition wall” of Polaris and Basel Petrochemical Company. The scale of upstream and downstream integration has obvious advantages and strong market competitiveness.
Kingfa Technology said that Bora New Materials is the main body of investment and construction of 600,000 tons/year ABS and its supporting equipment projects. The project is located in the Liaodong Bay New District, Panjin City, Liaoning Province, a key petrochemical industry base planned by the state. It is equipped with a 300,000-ton crude oil terminal and a professional chemical terminal, which has good resources and location advantages.
ABS combines the toughness and low-temperature impact resistance of polybutadiene rubber, the heat and chemical stability of acrylonitrile, and the rigidity and gloss of polystyrene resin, so it has impact resistance, heat resistance, low temperature resistance, and chemical resistance. , Easy processing and molding, good gloss and other excellent comprehensive properties, widely used in automobiles, electronics, household appliances and other industries, and the company’s current main product application fields of modified plastics overlap, with significant upstream and downstream synergistic advantages. By holding 51% equity of Bora New Materials, it will help the company enter the upstream raw material industry such as ABS, consolidate the company’s position in the chemical raw materials and modified plastics industry, enhance the company’s profitability, and gain the ability to enhance the technological innovation capabilities of the entire industry chain Opportunities are in line with the company’s strategy of “strengthening the middle, expanding the two ends, leading technology, and leapfrogging development” and the interests of all shareholders.
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