Gansu Energy Chemical plans to acquire 100% equity of Jinchang Chemical, owned by the controlling shareholder

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Securities Times reporter Huang Xiang

On April 1, Gansu Energy Chemical (000552) announced that, the company is planning to purchase 100% equity interest in Jinchang Energy Chemical Development Co., Ltd., held by its controlling shareholder, Gansu Energy Chemical Investment Group Co., Ltd., by issuing shares and paying cash, and it also plans to raise supporting funds. Upon the company’s application, trading of its shares and convertible corporate bonds will be suspended from the market opening on April 2, and it is expected to disclose the transaction plan within no more than 10 trading days.

The announcement shows that the target of this transaction is 100% equity interest in Jinchang Chemical, and the counterparty is the controlling shareholder of Gansu Energy Chemical; therefore, this transaction constitutes a related-party transaction. Based on preliminary estimates, this transaction is not expected to constitute a major asset restructuring, and it will not result in any change in the company’s controlling interest. It also does not constitute a restructuring listing. As of the date of this announcement disclosure, this transaction is still at the planning stage, and related matters still involve uncertainties.

Gansu Energy Chemical said that this transaction is based on the company’s overall development strategy and deployment. Related matters still need to complete necessary internal decision-making and approval procedures by regulatory authorities. The company will, based on the progress of the matters, strictly fulfill its information disclosure obligations in a timely manner in accordance with requirements under laws and regulations. After completion of this transaction, the target company will become a wholly owned subsidiary of the company. Currently, the company has not disclosed details of the specific pricing of this transaction, the payment arrangements for the transaction consideration, or the specific intended uses of the raised supporting funds, among other details.

Previously, Gansu Energy Chemical disclosed a forecast of its 2025 annual performance, and it is expected to incur an approximate RMB 190 million net profit loss, while the prior-year period in 2024 recorded a profit of RMB 1.213 billion (adjusted). Year-on-year, it turned from profit to loss. Gansu Energy Chemical stated that the sharp decline in performance is, on the one hand, influenced by factors such as the macro economy, industry cycles, and changes in supply and demand: the price of the company’s core product—coal—has continued to decline, and the company’s year-on-year coal production and sales volumes have decreased somewhat, resulting in losses in the coal segment. On the other hand, the operating efficiency of the company’s business segments such as power, chemical, and infrastructure has not yet been fully released. Constrained by industry cyclicality and the market environment, their profit contribution is relatively limited, and it has not been able to effectively offset the losses in the coal segment.

From the industry perspective, 2026—being the start year of the “Fifteenth Five-Year Plan”—is a critical period for the domestic coal-to-chemical industry to transition to high-quality development. The industry will demonstrate development characteristics including strong policy constraints, increasing industry concentration, and accelerated green transformation. On the policy side, with “controlling total volume, improving quality, and strengthening green development” as the core, on one hand, new capacity for modern coal-to-chemical projects will be strictly controlled, and outdated capacity will be cleared at an accelerated pace. On the other hand, support for clean utilization of coal will be increased to drive the industry toward cleaner and more efficient upgrades.

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