China Ocean Development plans to acquire 4 companies

On the evening of January 13, COSCO Shipping announced that it plans to purchase all the equity of four container and logistics companies under COSCO Shipping Investment Holding Co., Ltd. (hereinafter referred to as COSCO Shipping Investment) by issuing A-shares. Meanwhile, the company's shares will be suspended from January 14.

It is worth mentioning that China Ocean Development to sell the acquisition plan is a big background, domestic shipping container demand surge, it is hard to find a box, and export container freight rates continue to rise sharply.

Buy stakes in four companies

Specific terms, the company intends to buy cosco shipping investment planned to issue A shares held the whole Oriental international container (qidong) co., LTD. 100% stake, the whole Oriental international container (Qingdao) co., LTD. 100% stake, the whole Oriental international container (ningbo) co., LTD. 100% stake in Shanghai and the whole logistics technology co., LTD. 100% stake.Trading in the company was suspended on January 14.

Up to now, the controlling shareholder of the listed company is China Shipping Group, which holds 4.412 billion shares of the company, with a shareholding ratio of 38%. The actual control of CCOD is the State-owned Assets Supervision and Administration Commission of the State Council.

From the perspective of counterparties, according to the company disclosure, COSCO Shipping Investment is a limited company validly established and existing under the laws of Hong Kong.According to the official website of COSCO Shipping Investment, the company was established in 1998, formerly known as China Shipping (Hong Kong) Holdings Limited, which is a wholly owned subsidiary of the former China Shipping (Group) Corporation.

Therefore, this transaction constitutes a related transaction.CCOFA said that it is not expected to constitute a major asset restructuring, but it involves the purchase of assets by issuing shares, and the transaction will not lead to a change in the actual controller of the company.

In terms of transaction objects, the four enterprises are wholly owned subsidiaries invested by COSCO Shipping, mainly engaged in container and logistics business, and the enterprise type is wholly owned by legal persons from Taiwan, Hong Kong and Macao.

Among them, Global Orient International Containers (Qidong) Co., Ltd. was established on December 16, 2010 with a registered capital of 220 million US dollars. Its business scope includes container leasing service.Mechanical equipment research and development;Mechanical equipment sales, etc.Global Oriental International Containers (Qingdao) Co., Ltd. was established on January 14, 2003, with a registered capital of 126,605,700 US dollars. Its business scope includes manufacturing standard containers, special containers and insulated containers.

Global Orient International Container (Ningbo) Co., Ltd. was established on July 26, 2005 with a registered capital of 20 million US dollars. Its business scope includes steel container and special container, container spare parts and steel structural parts manufacturing.Shanghai Huanyu Logistics Technology Co., Ltd. was established on September 24, 2008 with a registered capital of 5 million US dollars. Its business scope includes technology research and development, technology service, technology consulting and technology transfer in the field of logistics technology.

The price of the underlying assets was not disclosed in the announcement.The company said that it would employ an asset appraisal agency recognized by both parties to evaluate the underlying assets and issue an Asset Appraisal Report.The final price of the underlying assets shall be based on the appraisal value confirmed in the asset appraisal report issued by the aforesaid asset appraisal institution and put on record by the competent state-owned asset supervision and administration institution, and shall be determined by both parties through negotiation.

However, CCOFA also reminds the risk that the current transaction is in the planning stage, the two sides have not signed a formal transaction agreement, the specific transaction plan is still to be discussed and demonstrated, the relevant matters are still uncertain.The transaction still needs to be submitted to the board of directors and the general meeting of shareholders of the company for deliberation, and approved by the competent regulatory authorities before it can be formally implemented. Whether the approval can be passed is still uncertain.

Demand for containers has soared

The business of CNOOC includes shipping and related industrial leasing, container manufacturing, investment and service business, among which the scale of ship leasing business of CNOOC ranks first in the world, and the scale of container leasing business ranks second in the world. The capacity of container manufacturing business ranks first in the industry, and the scale advantage is prominent.

Affected by the epidemic, the company's business in the first half of last year suffered a certain impact.In the first half of 2020, the company's operating income reached 7.841 billion yuan, up 14.18% compared with the same period last year.Net profit was 853 million yuan, down 5.55% slightly

From the perspective of the largest business of CCOD, the operating income of the company's leasing business was 5.752 billion yuan, accounting for 73.36% of the total revenue of the company, up 9.70% from 5.243 billion yuan in the same period of last year. Among them, the income from ship leasing was 2.568 billion yuan, up 4.97% from 24.46 yuan in the same period of last year.Revenue from ship operating lease was 2.274 billion yuan, and revenue from ship financing lease was 290 million yuan.As of June 30, 2020, 86 ships have been leased by the company.

In addition, the company's revenue from container leasing, management and sales was 1.81 billion yuan, up 10.23% from 1.641 billion yuan in the same period last year.In this regard, the company said, mainly because the company this year to play the rental and manufacturing linkage effect, expand the market share, seize the European and American route return box shortage market opportunity, actively increase sales, second-hand box sales increased by 31%.

Entering the second half of 2020, the company's performance grew strongly, benefiting from a huge surge in container demand.On October 30, 2020, the company released the third quarter report showed that the third quarter achieved revenue of 4.905 billion yuan, a year-on-year growth of 46.64%;Net profit was 819 million yuan, up 111.21% year on year.

CCOD recently revealed on the interactive platform when replying to investors that, with the growth of export volume and the improvement of container demand, the rental level of the container leasing market has increased, the long-term contract of the company's container leasing business accounts for more, the leasing rate remains at a high level and the rate remains stable.At the same time, the disposal and sale of second-hand boxes also benefited from the rise in market prices, which is conducive to improving the overall revenue of the container leasing business sector.