Industry Observation: The First Single Layout Of Overseas M & A Is Far-Reaching.

On June 15th, at the news conference of Hongkong Lixin Industrial Co., Ltd. (hereinafter referred to as "Hongkong Lixin industrial"), Zhang Jie, chairman of China Heng Tian Group, announced that Heng Tian Group has completed a comprehensive acquisition of Hongkong Lixin industry, and Hongkong Lixin industry has been officially incorporated into China's Heng Tian company. "Hongkong Lixin industry and China Heng Tian Group has become a good fortune for the industry and the national textile industry. It is a model for the cooperation between the central enterprises and family businesses in the new era." Zhang Jie highly praised the cooperation. 　　

China's Heng Tian mergers and acquisitions industry is a major event in the Chinese textile machinery industry. Many industry elites visit the venue to witness this moment.

Reorganization background: strong and strong joint efforts to complement each other's strengths

In January 7th of this year, China Heng Tian signed an agreement with the shareholder, chairman and executive director of Hongkong Lixin industrial control group, and China Heng Tian bought a stake of Lixin industrial major shareholder at a premium of HK $5 per share before the deadline of May 7th. After that, China will continue to hold shares of Li Xin Industrial 55%~77.9%, which still maintains the HKEx's listing qualification, as stipulated in the agreement. 00641.HK, a listed company on the stock exchange of Hongkong 48 years ago, was formally incorporated into China's Heng Tian company.

China Heng Tian Group is the largest in China. Textile industry The group is also the only central enterprise specializing in textile equipment manufacturing, and the production scale of textile machinery ranks second in the world. China's Heng Tian has strong strength in the fields of cotton spinning and chemical fiber equipment. The development of dyeing and finishing machinery is lagging behind. Therefore, Heng Tian Group has always been hoping to further develop the dyeing and finishing machinery business sector, and has incorporated dyeing and finishing machinery business into the overall development plan of the group in the future. The market of China's dyeing and finishing industry is relatively fragmented, with the market share of the top ten enterprises occupying 15.32% of the market share. Among them, Lixin industry and China Heng Tian are in the first and two position respectively in the industry, and the market share has greater advantages than other enterprises.

Hongkong Lixin industry, founded in 1963 by Fang Shoulin, has been an international leading manufacturer of dyeing and finishing equipment. It was listed on the Hongkong stock exchange in 1990 and became the first enterprise in Hongkong to be listed in the dyeing and finishing industry. At present, Hongkong Lixin industry is the best and largest manufacturer of dyeing and finishing equipment in the world. It can provide one-stop service to customers. Pre processing, dyeing and finishing processes can meet customer requirements and have greater influence in the international market.

The two strong will join hands in resources. market And technology has a strong synergy effect.

Strategic goal: strengthening the discourse power of national textile industry

Zhang Jie said, "the history of the growth and development of Hongkong's Lixin industry is the epitome of the growth history of China's textile printing and dyeing industry for half a century. China's Heng Tian Group's strategic mergers and acquisitions industry, after many years of planning and preparatory work, is actively promoting. Textile machinery Group cotton spinning, chemical fiber, printing and dyeing three strategic plates in the context of cautious selection results. Through the acquisition of Lixin industry, it has made up the short board of China Textile Machinery Group's printing and dyeing board, improved the overall assets quality of China's Heng Tian Group, greatly enhanced the competitive advantage and profitability of the main business of the textile machinery industry, and made a big step towards the overall development direction of the textile machinery business, which is the most comprehensive textile industry in the world.

At present, China Heng Tian is taking overseas acquisitions as one of the most important strategies for the company to develop its global business and become bigger and bigger. Due to the impact of the global economic crisis since the second half of 2008 and the cyclical downturn in the textile industry, the valuation of many enterprises in the global textile machinery industry, including those with the most advanced technology and brand, is at a historic low. Moreover, the trend of the withdrawal of developed countries and regions from the industry is increasingly obvious. It provides a rare historical opportunity for China to buy overseas textile machinery enterprises.

China's strategy for the acquisition of Lixin industry is the ultimate goal of China's restructuring of the textile industry, which is to reorganize the resources of the leading technology and quality brands in the global dyeing and finishing machinery industry, and to enhance the overall strength of our textile industry in the upstream, high value-added and high profit areas, and to promote the upgrading of China's textile industry. It helps to achieve the integration of quality assets, become a powerful country with strong power, have a holding enterprise, help build a more competitive industry leading enterprise, and conform to the extension of the industrial chain of Heng Tian Group, and build the development strategy of the dyeing and finishing machinery business sector.

Choose Lixin industry as the first single form of overseas mergers and acquisitions.

Business mode: four aspects of integration and development of "Li Xin mode".

After the strategic reorganization, China Heng Tian will maintain and carry forward the "Ericsson model" - advanced international technology, international talents, domestic manufacturing and global sales. In terms of team, Li Xin's sales team, R & D team and production management team will maintain the status quo. "We maintain the existing mechanism to maintain the core team, so as to maintain and make good use of international talents and technology." Zhang Jie said that the deeper significance is that Heng Tian will introduce the "Li Xin model" into the various enterprises of the China Textile Machinery Group, so that the textile machinery enterprises can learn and learn from each other and become a way to effectively improve the operation level of the textile machinery group.

Zhang Jie also said that at the level of market operation, Heng Tian Group and Li Xin industry will be closely integrated in four aspects: "first, we will consider how to make use of the resources and platforms available on both sides to seek more and more valuable cooperation in the international and domestic markets. For example, Li Xin's international sales are stronger than those of China spinning machine, while Heng Tian has an advantage in domestic sales. Second, in terms of operational procurement, Heng Tian group can make use of the company under Li Xin's company's global sourcing, such as China Textile machinery to enter the stainless steel procurement of Lixin, such a large purchase volume will also reduce the purchasing cost of everyone at the same time. Third, Heng Tian Group now has a financial platform, will also create a financial platform for textile machinery, in the future can provide users with more comprehensive services, such as leasing business, and so on, in terms of capital support to further enhance the competitiveness of Li Xin products marketing. Fourth, the two sides can also jointly develop technologies, such as Lixin and reclaimed environmental protection products. The group also has water treatment technology co operating with Tianjin University of Technology, which is both a related business and a common economic growth point.

Development strategy: Taking the path of connotative and epitaxy

"Customer oriented" and "creating profits and value for customers" are the common pursuit of Lixin industry and Heng Tian Group. Li Xin's English "FONG S National" reflects the sentiment of the national brand, and it is shining with Hengtian Group "FOR THE PEOPLE, FOR THE LIFE" (Hui Yue Yu Min, Heng Da world).

The future development of Lixin industry should further integrate the resources from the global perspective, enhance the competitive advantages of dyeing and finishing equipment, stainless steel casting and other related businesses and take the development path of connotative and epitaxy. On the basis of adhering to the advanced management system and operation mechanism, we should constantly optimize the organizational structure and improve the management efficiency; timely start the staff incentive plan, innovate the personnel mechanism, cultivate and expand the talent team; pay attention to the two wheels of capital operation and scientific and technological innovation, so as to promote the rapid growth of Lixin industry and continuously enhance the capability of independent innovation and main industry profitability. {page_break}

Li Shun, chairman of the industrial side, believes that Heng Tian Group is a leading enterprise in the domestic textile industry. It has rich management experience and widely recognized prestige in the industry and is the best partner of Lixin industry. And Fang hopes to retain his stake in Lixin industrial 10%~ 20%, which reflects his confidence in the future development of Heng Tian takeover company.