Shougang to shuffle assets in listing move
(China Daily)Updated: 2007-02-13 15:23
Shougang now has a combined production capacity of 13 million tons a year in Beijing its current home base and neighboring Hebei Province. Last year, it produced 10.5 million tons of crude steel, reaping almost 2.7 billion yuan in profit.
The company plans to halt all steel production in Beijing, host of the 2008 Olympics, by 2010 to alleviate pollution, in line with central government orders.
Beijing Shougang Co Ltd, which went public in 1999, now accounts for a small part of the parent Shougang in terms of production, assets and profits.
The company, 73.2 percent owned by the parent, made less than 4 million tons of crude steel last year, it said. Its total assets stood at 16.2 billion yuan by the end of 2006, compared with the parent's more than 100 billion yuan.
In the first three quarters of last year, the listed firm reported 447.8 million yuan in net profit.
It ended at 4.57 yuan per share yesterday, up 1.11 percent.
While China's steel sector has seen some mergers and acquisitions (M&As) in recent years, industry officials and analysts said the pace was too slow, as it remains highly fragmented with over 800 players.
Last month, Baosteel based in Shanghai spent 3 billion yuan to buy a 69.6 percent stake of Bayi Iron & Steel Group, a smaller steel mill in Northwest China.
Luo Bingsheng, vice-chairman of the China Iron & Steel Association, said earlier that domestic steel companies should speed up M&As to become more competitive for fear of being bought by foreign steel giants.
In 2005, the world's top steel producer Mittal acquired a 36.7 percent stake in Valin Steel Tube & Wire Co Ltd, a Shenzhen-listed steelmaker.
Arcelor, the European steelmaker taken over by Mittal last year, is awaiting approval from Chinese regulators to buy a 38.4 percent stake in Laiwu Iron & Steel Co Ltd listed in Shanghai.
Crude steel production in China hit a record high of 418.8 million tons last year, climbing 18.5 percent from 2005, according to data from the steel association.
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