Home Business What are the calculations of privatization of Kukamei?

What are the calculations of privatization of Kukamei?

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Got germanyrobotFour years after the company’s KUKA (KUKA) exceeded 90% of its shares, Midea decided to include 5.45% of KUKA’s last circulated shares.

In the evening of November 23,Midea GroupAnnounced that it intends to fully acquire the equity of KUKA, a company listed on the Frankfurt Stock Exchange in Germany, through a wholly-owned subsidiary.Kuka’sannouncementIt shows that this acquisition is expected to be held in May 2022shareholderVote at the conference.

And Midea’s bigger plan is to privatize KUKA. Why did Midea choose to completely acquire and privatize KUKA, which it has actually controlled, at this time? In the four years of consolidation, how did KUKA perform?Can the privatization of KUKA be boosted?Midea GroupHow long has the stock price hovered below 75 yuan?

  Will it be listed again?

  Midea GroupThe proposed acquisition and privatization plan has obviously stimulated KUKA’s capital market.

On November 24, as of the China Times reporter’s press release, the trading price of KUKA on the Frankfurt Stock Exchange was 74.2 euros, an increase of 1.09% over the previous trading day. On November 23, KUKA’s share price closed at 73.4 euros, an increase of 8.58%.

KUKA’s current price is much cheaper than Midea’s 115 euro tender offer to KUKA shareholders five years ago. According to a reporter from China Times, the offer price of 115 euros represents a premium of 36.2% compared to the closing price of KUKA the day before Midea announced the acquisition.

And even without considering the 30% premium, the acquisition of KUKA is now a relatively cost-effective moment. KUKA’s performance in the capital market has been ups and downs in recent years. On June 30, 2016, when the acquisition agreement was signed, KUKA’s stock price closed at 107.6 euros.While being consideredrobotIn 2017, when the industry peaked, KUKA’s stock price rushed to 250 euros in October of that year.

However, Midea Group has become the absolute controlling shareholder of KUKA in early 2017.

In January 2017, Midea Group announced that it has held 37 million shares of KUKA through its wholly-owned subsidiaries, accounting for 94.55% of the issued share capital, with a total price of approximately 29.2 billion yuan. “China Times” reporters also saw in this year’s semi-annual report that the goodwill allocated to KUKA in the current period was 21.872 billion yuan, more than 70% of its overall goodwill.

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Regarding the complete acquisition and privatization of KUKA, Midea said that this acquisition will help KUKA focus on business operations and enhance the company’srobotCollaborate and share internal resources with automation-related business areas.

Lu Zhangyuan, director of the Advanced Robotics Industry Research Institute, also believes that this move will accelerate the collaboration between Midea and KUKA. He told a reporter from China Times that although KUKA has only 5% of minority shareholders, listed companies have their own related processes. “For Midea, there are still some areas that are not good.” In addition, many people in the industry When communicating with reporters from China Times, the people also believed that, referring to past cases, after Midea privatized KUKA, it could not be ruled out that it would be listed on the Science and Technology Innovation Board separately.

However, on November 24, in response to a reporter from China Times about whether there is a plan to relist in the privatization of KUKA and other related issues, Midea said that all matters concerning KUKA shall be subject to Midea Group’s external announcements.

  The Chinese market is the key

KUKA is one of the four major industrial robot families, and automotive robots are its traditional areas of advantage. When Midea acquired KUKA, it was considered by the outside world to be a landmark event in its transformation from a home appliance company.

However, from the overall market perspective, in the first half of this year, KUKA’s robotics, automation systems and other manufacturing industries had revenue of approximately 12.7 billion yuan in the current period, accounting for only 8.2% of Midea’s overall revenue.22.94% of the business’s current grossinterest rate, Is also lower than the overall level of Midea’s manufacturing industry.

In the case of KUKA, after entering Midea, itsNet profitIn 2017, it reached a peak of 591 million yuan. But then turned around and down. In 2018, its net profit was 100 million yuan, a drop of more than 80%. In 2019, this figure continued to fall to 76 million yuan, and in 2020, affected by the epidemic, KUKA had a net loss of 827 million yuan.

According to a reporter from China Times, KUKA’s revenue mainly comes from the European and American markets. Midea Group revealed at the investor exchange meeting in March this year that these two markets were more affected by the new crown epidemic, resulting in a downturn in the overall market. Midea believes that the improvement of KUKA Group requires the recovery of the European and American markets and the promotion and expansion of business in the Chinese market.

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Compared with the European and American markets that are waiting to recover, the Chinese market, where the epidemic is better controlled, is increasingly becoming a key factor for KUKA to reverse the decline.

According to the reporter’s understanding, KUKA China Division was established in 2019. An insider told a reporter from China Times that according to his observation, from the perspective of product, business, and organizational structure integration, KUKA and Midea’s integration efforts are increasing this year.

In fact, Midea also released positive news about KUKA in the Chinese market in the second quarter. In response to investor questions on June 11, Midea Group stated that by 2025, it will strive to increase the proportion of KUKA’s revenue in China to 30%. Midea Group also revealed at the investor exchange meeting on July 20 that KUKA expects the full-year EBIT (earnings before interest and tax) to be positive in 2021, and the future focus of KUKA’s work includes promoting the localization of KUKA in China. Operations, etc.

Lu Zhangyuan also told a reporter from China Times that from the perspective of the Chinese market, 2017 was a small peak in the robotics market, but due to the macro environment, the willingness to invest was hesitated. The robotics industry turned down in 2018, and the market growth rate has increased from about 60%. Fell to more than ten percent. In 2020, which is experiencing the impact of the epidemic, the domestic robotics industry has experienced a low open and high rise, with a growth rate exceeding 2019. But he also believes that KUKA previously had a large proportion of its business in the automotive sector in Europe and the United States, and it will take time to reverse it.

  Where is the imaginary space

Compared with the reaction of the KUKA capital market, Midea Group’s enthusiasm for harvesting in A shares is not high. On November 24, Midea Group’s share price closed at 70.15 yuan, a slight increase of 0.98%.

Part of the reason may be because, from a cross-sectional view, the acquisition does not thicken the beauty.Performance

After KUKA entered Midea’s net profit of 690 million yuan, the highest peak, accounting for only 3% of Midea’s net profit attributable to the parent in the first three quarters of this year. In addition, based on a rough calculation of the total share capital of 39.78 million shares of KUKA, 5.45% of the shares are worth about 160 million euros (about 1.15 billion yuan). Compared with the group’s cash flow of about 27.9 billion yuan in the third quarterly report, this acquisition is not a problem.

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Compared with the calmness of the secondary capital market, Midea founder He Xiangjian offered a more generous price. On the evening of November 23, Midea Group also announced that He Xiangjian had completed a 1.05 billion yuan holding plan, increasing his holdings of approximately 14.313 million Midea shares. Based on this rough calculation, the average price per share of He Xiangjian’s increased holdings is about 73.3 yuan.

What needs to be mentioned is that the closing price of 70.15 yuan on November 24 has shrunk by about 34% compared to the 52-week peak stock price of 105.84 yuan obtained by Midea in February this year.

An insider in the home appliance industry told a reporter from China Times that, affected by factors such as the sharp rise in the cost of upstream raw materials and fluctuations in the export shipping market, home appliance companies were collectively under pressure this year and the capital market was weak.

Not only beautiful,Haier ZhijiaThe closing price of 27.79 yuan on November 24 has fallen by about 22% from the 52-week high.Gree ElectricThe closing price of 35.73 yuan that day has also fallen by about 45% compared to the 52-week high. In fact, the stock prices of the three giants of white appliances this year all appeared in the first quarter of this year.

In the relatively weak home appliance market, the follow-up collaboration between Midea and KUKA in the Chinese robotics market may be more able to arouse the attention of the capital market.Everbright SecuritiesThe report also shows that, according to the telephone exchange of the US China News, about 50% of KUKA’s production is currently completed in China, and it is expected that China’s revenue will account for 20% in 2021.

Capital is more concerned about where KUKA will go after the completion of privatization.

(Source: China Times)

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