Hubei to accelerate the expansion of the next 10 years (figure)

Drawing/Wang Li as a leading enterprise of fertilizer industry in China, Hubei Province (000422) is ranked as the 5th place in the chemical industry in the Chinese Securities newspaper 2009 listed companies. From 2001 Shangwa took over the chairman of Hubei Yi-group, Hubei Yi-he embarked on the road of rapid expansion.　　For more than 10 years, Hubei Province has developed from a small local nitrogenous fertilizer enterprise into a nationwide large-scale chemical enterprise.　　After so many years of rapid development, Shangwa said, the appropriate in the next 10 years will be rapid expansion, planning projects have been arranged to 7, 8 years later, "There are markets, projects, banks and financing, why not continue to big"? Revenue 9 years, 14 times times this year, Hubei to achieve total operating income of 2.327 billion yuan, growth of 17.44%, net profit of 170 million yuan, the year-on-year increase of 219.78%, earnings per share 0.3149 yuan.　　2009, Hubei Province to achieve the total operating income of 8.76 billion yuan, an increase of 22.86%, net profit of 238 million yuan, down 4.37% year-on-year, earnings per share 0.428 yuan. Compared with the financial data can be found, Hubei to achieve the first quarter of the net profit for the year 72%, the company has shaken off the impact of the financial crisis, performance back to the rapid growth of the track. Sorting out the data since 2001 shows that the company's net profit has grown year-on-year, with the exception of 2008 and 2009.　　Operating income continued to grow, with 2009 revenue rising 14 times times from 2001. Behind the financial data is the rapid expansion of the company.　　The first step of expansion is to achieve diversification of products, starting in 2003, Hubei has gradually shifted from producing only urea to producing PVC, caustic soda and phosphate fertilizer. Coal is an important raw material for urea and PVC, and with the rising of coal price, there is no cost advantage in local products produced in Hubei.　　2000 coal price of only 100 yuan/ton, to 2008 has risen to 1000 yuan/ton, but the price changes in Hubei Yi product is not very small, so the second step of the expansion of Hubei Yi-cross-regional development, the transition to Guizhou, Inner Mongolia and other areas of rich coal resources.　　In addition to new projects, mergers and acquisitions become an important means of Hubei appropriate expansion, such as the acquisition of 100 million Yuan extraordinary High-tech 51% Equity, 150 million yuan to acquire the Southwest State Puan County Hengtai coal mine and Guizhou Credit Coal Co. "Twelve-Five" period, Hubei Yi will usher in a better opportunity for mergers and acquisitions. It is understood that China's chemical fertilizer Industry "Twelve-Five" development focus on the initial determination, enterprise integration and restructuring will become the most important.　　At the end of "Twelve-Five", the number of nitrogenous fertilizer enterprises was reduced to 200, and the number of phosphate enterprises was reduced to 150. Shangwa said that mergers and acquisitions will focus on the selection of good resources, good market, promising enterprises. Next, the company will extend to the upstream resources industry, the future of Hubei's industrial main layout in the resources, coal chemical will be the main layout in Inner Mongolia,Xinjiang, Qinghai, Guizhou, phosphate chemical distribution in Hubei. The intense expansion of the asset-liability ratio has also brought about a corresponding problem.　　Shangwa admits that in recent years the company has not refinanced, expansion relies on bank loans, and the asset-liability ratio has increased, requiring refinancing to address this problem. As of December 31, 2009, the total amount of bank loans reached 5.982 billion yuan. In the two consecutive years of 2008 and 2009, the ratio of assets and liabilities in Hubei was more than 70%, compared with 40.68% in 2001.　　2009, Hubei Province to achieve a total profit of 544 million yuan, financial costs are as high as 345 million yuan. The company said that relying mainly on increasing bank loans to solve the problem of liquidity shortage has increased the size of the debt.　　A large number of bank loans to increase the company's financial costs, high asset-liability ratio limits the company's subsequent debt financing capacity, not conducive to the company's continued sound operation.　　BEIJING China can Societe Generale Investment Consulting Co., Ltd. Business director Zheng Weizheng said that Hubei's appropriate asset-liability ratio in the chemical fertilizer industry in the first echelon, the company's debt rights and interests than as high as twice times higher, ranking more than before, financial leverage is larger, if the project returns, the company will face greater risk.　　April 15, Hubei appropriate announcement, the company intends to non-public offerings of not more than 150 million shares, the price is not less than 18.51 yuan/share, the total amount of funds not more than 2.5 billion, mainly for Xinjiang to increase capital, the construction of annual production capacity of 400,000 tons of ammonia, 600,000 tons of urea project. The recent downturn in the stock market, Hubei Yi-Price has fallen below the non-public offering prices, this gives the company's prospects for the issuance of a shadow.　　Analysts believe that if the market continues to be depressed, Hubei can be adjusted by the reduction of additional prices to achieve refinancing. But companies may not be able to cut their IPO price easily. May 21, Hubei Gaoriza Bulletin held 300,000 shares, of which Shangwa to 16.08 yuan/share price to buy 100,000 shares.　　The group then said that the next three months will be increased in Hubei Yi 2 million shares, overweight price of not more than 22 yuan, far higher than the additional price and Hubei to the appropriate price. Restructuring has been brewing for many years to rethink the recent 10 years of the expansion of Hubei, Shangwa nail behind the impetus: "Restructuring very well mobilized the state, senior executives, staff enthusiasm." "The group's reform plan was approved by the Yichang People's government on April 19 and the shareholding structure of the group will be changed." The senior management and business backbone of the IKEA Group and its subsidiaries are proposed to establish Yichang Wealth Investment Management Co., Ltd.　　50% equity of Guizhou Yihua Chemical Co., Ltd. to be held by Fortune company Hubei Yi Chemical Fertilizer Industry Co., Ltd. 50% of the equity, Hubei double-ring technology alkali Industry (Chongqing) Co., Ltd. 49% of the equity, Chongqing Yi Chemical Co., Ltd. 55% of the equity and part of the cash capital of the way to the appropriate group to increase capital expansion shares. After the completion of the replenishment of the group, the group was changed from a wholly state-owned company to a state-owned holding company. The group is committed to, after the completion of the increase in capital expansion,As soon as possible to carry out the relevant decision-making procedures, will be held in Guizhou 50% of the equity, the appropriate fertilizer industry 50% of the equity to be injected into the proper way to Hubei.　　Shangwa said that appears to be a relatively sudden announcement, in fact, the restructuring has been brewing for many years, but also a system of arrangements, the annual wealth company expected to be the price of the shares will be determined. For listed companies, the impact of group restructuring is mainly followed by asset injection. Hubei Province of the 2009 annual report shows that the appropriate fertilizer industry to achieve a net profit of 16.03 million yuan, Guizhou to achieve a net profit of 88.34 million yuan.　　The two companies total net profit of 104 million yuan, and Hubei province in the period of net profit of 238 million yuan. Shangwa said the profitability of listed companies would be enhanced after asset injection. The price of buying minority interests is bound to be the same as the price injected into a listed company, and wealth companies will not profit by the difference.