The hottest Sany merger is hard to see iron teeth

Sany M & A is difficult to see "iron teeth and copper teeth"

Guide: the capital chain is the blood of enterprises. When it expands, it is actually redrawing the path for this blood circulation. Although Sany in the Shenyang Machine Tool incident more reflects the embarrassing situation of M & A as a private enterprise, as far as the fundamental factor of M & A is concerned, the smoothness of the capital chain affects its merger

the capital chain is the "blood" of enterprises. When it expands, it is actually redrawing the path for this "blood circulation". Although Sany in the "Shenyang machine tool" incident more reflects the embarrassing situation of mergers and acquisitions as a private enterprise, as far as the fundamental factor of mergers and acquisitions is concerned, the smooth capital chain affects the basis of its mergers and acquisitions

in October 2005, Carlyle investment group, an international investment institution, wanted to acquire Xuzhou Group Construction Machinery Co., Ltd., China's largest construction machinery manufacturing enterprise. Carlyle plans to invest and acquire up to 85% equity of XCMG machinery at a price of 3billion yuan in cash. The government and related enterprises expressed extreme anxiety about the fact that the controlling rights of major enterprises fell into the hands of foreign investors, and then this merger and acquisition storm was raised to the height of national economic security. Subsequently, the terms of the acquisition were revised again and again. Finally, Carlyle announced that it would acquire 45% of the equity of XCMG machinery for 1.8 billion yuan. Existing insiders said, "the cooperation with Carlyle is still in normal negotiation, and there should be results in the near future, but then there is a report that the steel strand testing machine mainly includes two models of GLA (6) 00 and GLA (1) 000. The Ministry of affairs and other competent departments have approved a series of procedures to go."

Xiang Wenbo, executive president of Sany Heavy Industry, has become even more famous since Carlyle's acquisition of XCMG, which has also attracted the attention of its listed company Sany Heavy Industry (600031). However, Sany failed in the recent 30% equity bidding of Shenyang machine tool. Previously, Xiang Wenbo said on his blog, "it is wrong to deify foreign capital, and it is also wrong to demonize foreign capital"; He said at the 2007 M & a annual meeting, "I think supporting national industries and M & A should be parallel"; "Antitrust should be antitrust"

Sany went to buy wheat on Shenyang machine tool. Although there are various "barrier" factors in the merger and acquisition of state-owned enterprises by private enterprises, does Sany have enough capital chain to support this merger and acquisition? Although Sany's failure this time is more due to factors such as "40% equity" and "no exit mechanism", Sany's M & A ability is still questioned, especially its capital chain. Moreover, in the "XCMG incident", some experts believed that Sany did not have the ability to acquire XCMG

doubts about capital operation

Sany's participation in the secondary market has long been regarded by the industry as a prelude to the integration of industries; Then, Sany's plan to acquire 40% of the equity of Shenyang machine tool with state-owned assets without an exit mechanism was denied, but its enthusiasm for M & A integration industry was undoubtedly revealed

since this year, the activity of Sany's secondary market has not only been reflected in its rising share price and good performance in the latest quarterly report, but also in its continuous large-scale subscription of shares of Listed Companies in the same industry in the secondary market

for the purchase of 13.4347 million circulating shares of Changlin shares (600710), which is generally considered by the industry as a prelude to the merger and acquisition of Sany Heavy Industry, Xiang Wenbo, CEO of Sany, explained that he had no intention of acquisition, just for the purpose of investment

in contrast to Sany's 2006 annual report, its stock and fund investment income in that year was 92.247 million yuan, 43 times higher than its similar income of 2.13 million yuan in the previous year

Changlin shares responded that the company is a subsidiary of a central enterprise, and the acquisition operation is difficult; Its controlling shareholder, China Fuma machinery group, therefore established another listed company of vanadium price early warning mechanism Group Co., Ltd., Su Fuma (600290, now known as Huayi Electric), and it is impossible to sell Changlin shares after Zhejiang Huayi Group becomes the owner

last year, Sany appeared on the list of shareholders of Shantui (000680) and Zoomlion (000157), while Changlin (600710) and Xiamen Engineering (600815) have been listed so far. Some industry researchers said that Sany frequently sold companies in the same industry, which did not rule out its tendency to expand its territory

since Sany CEO Xiang Wenbo "disrupted" Carlyle's acquisition of XCMG, the attention of all circles on foreign mergers and acquisitions and the construction machinery industry has further increased. Last year, Sany formally submitted the acquisition report to seven ministries and commissions including the state owned assets supervision and Administration Commission and XCMG, but XCMG resisted. However, Sany's move shows a strong desire to integrate industries

"test the water" Shenyang Machine Tool

the first 30% state-owned equity transfer of Shenyang Machine Tool finally came to an end, and the US hedge fund Ghana company "won"

Shenyang machine tool group was founded in 1995 after the assets reorganization of the three major machine tool plants in Shenyang. Shenyang machine tool is the core asset of the group. Zhang Jincan, a researcher in Guotai Junan machinery industry, pointed out that in terms of the core technology of NC machine tool production, Shenyang machine tool group only occupied part of the middle and low-end market; In addition, its management system needs to be significantly improved. Some people also believe that this is the real reason for Shenyang SASAC to transfer part of the equity of Shenyang machine tool

the plan issued by SANY is to obtain about 40% of the equity of Shenyang Machine Tool Group, and it promises to allocate another part of the fund for equity incentive of the management, while taking the asset mortgage as the performance guarantee. Ghana fund, on the other hand, requires 30% equity and has designed an exit mechanism, which is more in line with the wishes of Shenyang SASAC

however, from the perspective of the 40% equity of Sany and the requirement of no launch mechanism, it shows its desire to restructure and "take root" in Shenyang machine tool. However, from the congenital background of Shenyang machine tool, Sany's wish to become a state-owned enterprise as a private enterprise is ultimately difficult to achieve

compared with the role of "troublemaker" in the "XCMG incident", Sany in the "Shenyang machine tool" incident more reflected the embarrassing situation of being a private enterprise, which led to Xiang Wenbo's argument that "supporting national industries and mergers and acquisitions should be parallel". However, under the coverage of this layer of factors, as far as the fundamental factor of M & A is concerned, the smooth capital chain affects the basis of its M & A behavior

is the capital chain strong and unbreakable

Standard & Poor's credit rating issued the report "China's top 100 enterprises: China's economy in transition", which pointed out that the integration of China's automobile manufacturing industry, real estate industry, low-end steel industry and manufacturing industry is inevitable, and the significant weakening of profit growth in some industries may accelerate the process of industrial integration

behind Sany's strong desire for integration, it is the capital chain that has been questioned. Capital chain is the basic circulating capital chain necessary to maintain the normal production and operation of enterprises. In the process of "cash asset cash (proliferation)" cycle, in order to maintain the operation of enterprises, we must maintain the benign operation of this cycle

the capital chain is the "blood" of enterprises. When it expands, it is actually redrawing the path for this "blood circulation". Ensuring the continuous development of the capital chain is the foundation of enterprise management, so whether it is expanded or not, it cannot go against this foundation. In addition to the necessary financing capacity (including the use of government, banks and other extraordinary means), the smooth flow of the capital chain is also the key. Due to the excessive resistance of inventory and accounts receivable, the capital turnover rate of enterprises will be reduced, and even the chain will break

since the listing of Sany in 2003, it has been worried that the product business model has brought a always tight capital chain. When Sany Heavy Industry was listed, it was questioned that its prospectus was deliberately packaged, and its performance was also questioned

during the Sany share reform in 2005, some people in the industry said that the net cash flow from its operating activities was only 2.6174 million yuan, that is, in 2004, Sany Heavy Industry's sales revenue only recovered costs, and its profits were all accounts receivable; In 2003, the net cash flow from operating activities was only 70.6801 million yuan. "The net cash flow from operating activities of Zoomlion, with the closest strength and performance, was 233.0555 million yuan, 89.29 times that of Sany.". He also said that at the end of 2004, the debt of Sany Heavy Industry changed from 970million in 2003 to 2.36 billion. In this year, the financial expenses of Sany alone increased by 32.66 million

in the "XCMG acquisition case", Wang Yansong, deputy general manager of XCMG, once pointed out that Sany was facing huge financial pressure at that time; He also said that he had no confidence in Sany's ability to obtain cash. Moreover, according to its financial statements in the first quarter of 2006, its monetary capital is 1.018 billion yuan, while the short-term liabilities formed by notes payable and short-term loans are 1.493 billion yuan. Plus the long-term liabilities of 100million yuan (PHA) will expire within one year, the short-term capital gap has reached 773million yuan, which is far from the figure of US $487.5 million to acquire equity. From the perspective of financial data, cash inflows mainly rely on bank loans, which is described as "an unhealthy development trend of enterprises"

the transfer base price of Shenyang SASAC for transferring 49% equity of Shenyang Machine Tool Group is 1.65 billion yuan. The net asset corresponding to 30% equity of Shenyang machine tool is about 1.01 billion yuan, so the net asset corresponding to 40% equity is at least 1.35 billion yuan, and there is a premium over the net asset in the bid

however, BOC International believes that its financial position is sound. And said that its net debt ratio has been maintained within a reasonable range. Sany, as a leading enterprise of concrete machinery and piling machinery, will complete the acquisition of piling machinery this year. BOC International said that the cost of its acquisition of piling machinery assets was about 1billion yuan, which directly led to its large capital expenditure this year, which is expected to reach 1.3 ~ 1.4 billion yuan