The main business of securities trading and animal husbandry science and technology investment in China (0985.HK), is preparing a large-scale transformation journey.
Reporter that China's science and technology will be May 28 and June 1 shareholder meeting convened to discuss matters relating to share placement. According to China's science and technology series announcement, the share placement a total of 7.8 billion Hong Kong dollars. China Science and Technology, a staff member called Peter lee was the person in charge, told reporters that the 7.8 billion Hong Kong dollars, the 2.775 billion Hong Kong dollars will be used to acquire assets in Australia and Peru's copper mines, and the remaining project funds for additional investment of these deposits.
It is understood that China Science and Technology was established in 1978, early 1994 at the Hong Kong Stock Exchange Main Board since. Major investment in financial instruments, including investment securities and commodity contracts, trading, and another part of the property investment assets, the main shareholders are natural persons Zhu Yuehua. Listing 16 years, China has repeatedly issued technology transition notice, and has with loop vehicle, in molybdenum ore and gold operations Front Wave International is so rumored, but eventually all die a natural death.
This huge investment is considered masterpieces of the company's restructuring and was high expectations. Including Morgan Stanley, Deutsche Bank and BOC International formed a strong team of financial advisors and placement agents clear the way for.
China, a metal industry veteran, said: "The transformation of China's science and technology needs across the two major difficulties: Copper has a familiar management operations, and to promote the financing was adopted; change the market the company's past in the industrial and capital continue to walk a fine line between the impression. "
Management problems
According to our reporter about China's technology acquisition target is one of Canada's Chariot company-owned, located in southern Peru copper project MinaJusta 70% stake in the purchase price to 1.848 billion Hong Kong dollars. Information, MinaJusta total copper reserves of 163 million tons, 0.8% grade, capable of handling 12 million tons per year for oxide ore, 5 million tons sulfide minerals, annual volume of more than 100,000 tons of copper.
Another M & A target for the Australian copper project LadyAnnie all rights, purchase price of 9.27 billion. The total reserves of 11.2 million tons, resource grade of 1.1%, the current fixed capacity of 30,000 tons of electrolytic copper / year.
"To the current copper price 2000 yuan / ton to calculate, to Lady Annie project, for example, need to spend 1.09 billion Hong Kong dollars, the price of China's science and technology is not expensive to buy." Above industry analysis, on the copper, the grade value more than 3% is a good mine, less than the number of mining costs are higher, the quality of China's science and technology to get the copper is more general.
According to our reporter learned that the purchase price at 2.775 billion Hong Kong dollars, the China Science and Technology will invest 4.4 billion Hong Kong dollars for the Mina Justa development, invest 600 million Hong Kong dollars for LadyAnnie reached after a number of additional provisions and other general purpose payments. But the plan still need to May 28 and June 1 to discuss the results support the general meeting of shareholders.
The industry believes that the current lack of non-ferrous metals, especially copper management's operational experience is the most important challenge, "if the final two major copper deposits are all working together, China's science and technology have so many people to operate, and finally into the company good EPS? "
China Science and Technology chess move is a response: China Science and Technology earlier announced the appointment of the former Deutsche Bank managing director and Asia head of Damon Barber of metal mining company Executive Director and Chief Executive Officer and appointed in the global mining industry has more than 35 years of solid experience in Owen Hegarty Executive Director and Deputy Chairman for the company.
Chariot Rath, chairman of the explanation, despite a number of Chinese projects in Peru's skeptical, but the Chinese technology has been supported by the Hong Kong financier and has management team in Australia.
"But whether the integration of the previous team is in doubt because there are many precedents of failure." Galaxy Fund Analyst Jiang Yukun analysis of the knowledge structure of the senior management team need to be rebuilt, and senior team and the team also need to subordinate the mineral grinding process. "Also, if not the same minerals, such as need-hole mining, then open more than the cost."
Small cap funds raised from the big question
However, the transformation of China's science and technology in the past defeat, but also let some people in the transition to worry.
"Chinese science and technology market over the years, many through a share placement, issuance, issue a variety of convertible warrants, thereby diluting the equity, money and technology staged several circles, such as the 2003 or so on the three allotment and issue of convertible notes, and fund-raising 104 million Hong Kong dollars, which is cause for concern. "people familiar with concern that the aforementioned, some business and doing the story of capital operation, the ore brought down, store in 2012 Dengdai time change for the better and then sell, and ultimately take the capital game the road.
16 years from the listing of Chinese Science and Technology History, its track record of performance are less losses and more profit, such as the 2000 fiscal year net loss of 564 million Hong Kong dollars, the fiscal year 2001 loss of 347 million Hong Kong dollars, fiscal year 2002 through the sale of shares held before the majority of China's Internet the loss narrowed to 46.34 million Hong Kong dollars, China Science and Technology in March 2004 has increased to 60.53 million dollar loss. And even this year on May 14, China announced on science and technology, expects the company as of March 31, 2010, the year will be a loss.
China Science and Technology several restructuring efforts have repeatedly failed. In 2004, China Automotive Technology to be acquired 50% stake in loop, but at the end of 2005, ended in failure; 2007, China Science and Technology to be in transition to resource-based enterprises, and has access to the main business of molybdenum and gold Feng Front Wave International, acquired the latter case only, should the takeover succeed, it will surpass Luoyang Molybdenum, Mo became the industry leader.
"The key is the scale of 7.8 billion Hong Kong dollar funding too." Industry comment on the above, should the giant China Mobile so the financing company to promote such a plate, the market reaction is rather plain, but the Chinese small cap technology stocks like such a big raise capital, makes markets concerns, "funds to how to regulate, should the project too risky and difficult to control how to do business?"
It is understood that, in May 2009, China Science and Technology from the Australian company OZ Minerals Ltd. The hands of 211 million U.S. dollars to buy Indonesian Martabe gold, silver items, to 221 million U.S. dollars and then sold to Chilean hands, the rich energy resources and gain a more more income.
"Chinese science and technology need to let the market do its industrial firm impression." Jiang Yukun that in the acquisition, the Chinese science and technology into the development of 50 billion is a more reasonable figure.
"The acquisition of these copper deposits are all by our self, because our main direction to be in this one." Peter lee definitely told reporters that the acquisition of copper would be conscientious carriers China Science and Technology.
Barber, CEO of China Science and Technology also said the company is interested in copper mining and production, "the current project in line with our plan", China Science and Technology hope that other regions in Peru or Latin America, continue to seek investment.
With the acquisition, this reporter has learned that the projects will be renamed the Division of Mining Group, to declare its transformation to a market determination.
In the grand scheme to stimulate the transformation, the Chinese science and technology stock from May 7 to 0.25 Hong Kong dollar rose on May 25 along the way close to 0.37 Hong Kong dollars, or nearly 50% of the total.
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