Anning shares are heavily traded, Panzhihua Regal acquires the assets of CNNC Wang’s titanium dioxide family

Photo source: Visual China

Blue Whale News, February 20 (Reporter Xu Xiaochun)Mineral resources that had been suspended for ten years caused another disturbance. On February 19, Anning announced the acquisition of 100% equity in Jingzhi Minerals, and the company’s share price rose to a daily limit the next day.

Xiaoheqing Jingzhi Iron Mine, the core resource of Jingzhi minerals, is geographically adjacent to the Panjiatian Mine at the core of Anning Co., Ltd. In 2017, when Anning Co., Ltd. planned to go public, the two also sued for a road usage fee of 2.4 million yuan. In 2022, Jingzhi Minerals and affiliated companies that encountered a crisis will undergo bankruptcy and reorganization, and Anning Co., Ltd. attempts to complete the integration of adjacent mineral resources through acquisition.

However, Yingsheng Industrial, which emerged halfway through the road, won the qualification as a reorganization investor in Jingzhi Mining at a price exceeding Anning’s expectations of 6.5 billion yuan. According to the Daily Economic News report, Wang Deliang, the actual controller of Yingsheng Industrial, who holds 70% of the shares, is the father of Wang Zelong, the current actual controller of CNNC Titanium White. Now, after going through trouble, Anning will regain all the equity in Jingzhi Minerals from Wang Zelong and his son.

At the same time, Anning’s integration strategy accelerated. On the same day, Anning signed a credit line of 25 billion yuan with two banks to meet the capital needs of mergers and acquisitions, development and other funds.

Acquisition of missed minerals from Wang Zelong and his son

On the evening of February 19, Anning announced that it would obtain 100% equity of Panzhihua City Jingzhi Minerals Co., Ltd.(hereinafter referred to as Jingzhi Minerals) by paying cash. On February 20, Anning shares had a daily limit at the opening of the market and had not opened as of the close. At the close, Anning’s share price was 32.59 yuan/share, and the company’s market value was approximately 15.3 billion yuan.

Jingzhi Minerals are owned by Wang Zelong and Wenzhou Yingsheng Industrial Co., Ltd.(hereinafter referred to as Yingsheng Industrial Co., Ltd.), with 70.02% and 29.98% shares held respectively. Huili County Hongxin Industry and Trade Co., Ltd.(hereinafter referred to as Hongxin Industry and Trade) and Panzhihua City Liyu Mining Co., Ltd.(hereinafter referred to as Liyu Mining) are wholly-owned subsidiaries of Jingzhi Minerals.

At present, Jingzhi Mining, Hongxin Industry and Trade, and Liyu Mining are still in the process of substantive merger and reorganization, and there is no specific plan for the acquisition of Anning Shares. However, the relevant parties signed the “Restructuring Investment Intention Agreement” on October 19. If the transaction is completed, Jingzhi Minerals, Hongxin Industry and Trade and Liyu Mining will become wholly-owned subsidiaries of Anning Co., Ltd.

It is worth mentioning that Wang Zelong, the major shareholder of Jingzhi Minerals, is the actual controller of China Nuclear Titanium White, a listed company. As of the end of September 2024, Wang Zelong directly holds 33.45% of CNNC Titanium Dioxide. According to the Daily Economic News report, Wang Deliang, the actual controller of 70% of Yingsheng Industrial, is Wang Zelong’s father. Wang Deliang and Fang Buchen, another shareholder of Yingsheng Industrial, have appeared among the top ten shareholders of CNNC Titanium Dioxide.

Anning shares have been tied to mineral resources for a long time. The most important asset of Jingzhi minerals is the mining rights of Xiaoheqing Jingzhi Iron Mine in Huili County, which is adjacent to Anning’s Panjiatian Mine.

In 2017, when Anning shares rushed to go public, it was involved in a litigation dispute with Jingzhi Minerals. According to the prospectus, Anning Co., Ltd. once invested in the construction of Anpan Highway between Provincial Highway 204 and Panjiatian Mine for mine production and operation needs. Jingzhi mineral business vehicles have been using the Anpan Highway since 2002, and promise to pay Anning a road usage fee of 200,000 yuan every year. However, Jingzhi minerals only paid royalties before the end of 2004, and a total of 2.4 million yuan in royalties from 2005 to 2017 were not paid.

However, in the end, according to the Sky Eye App, in August 2017, Anning Resources withdrew the lawsuit and assumed a case acceptance fee of 13,000 yuan.

Among the three companies that Anning plans to acquire, Jingzhi minerals have mining rights. Hongxin Industry and Trade’s main assets are titanium separation equipment and tailings ponds. Liyu Mining’s main assets are iron separation equipment. The three companies jointly form an integrated system for raw ore mining, iron concentrate and titanium concentrate washing and tail discharge. The production lines are linked to each other and the core assets are used in a supporting manner, forming a complete vanadium-titanium magnetite mining and washing system.

However, both winners and losers have also been defeated. According to the Huili Municipal People’s Court, due to the fact that the resource reserves within the scope of the original mining right certificate for refined minerals have been almost exhausted, and the new mining right certificate has not been obtained for some reason, the refined minerals have been suspended for a long time since 2015. Hongxin Company and Liyu Company, as supporting selection plants for refined minerals, have also been forced to stop operating and fall into serious insolvency.

In 2022, Anning shares have the intention to acquire refined minerals. In November 2022, Anning announced that it would form an investment consortium with Revitalization Fund and Silk Road Fund to sign up to participate in the recruitment of investors for bankruptcy reorganization of Jingzhi Minerals and Hongxin Industry and Trade. Anning shares hopes to realize the overall development of the two mineral rights through integration and maximize the value of resources.

In November 2023, the qualifications of reorganization investors in the reorganization cases of three companies, including Jingzhi Minerals, were publicly auctioned, with a starting price of 1.738 billion yuan. But in the end, Yingsheng Industrial, one of the current investors of Jingzhi Mineral, bid for 6.508 billion yuan, with a premium rate of 274.4%. Anning said in the announcement that after the company’s comprehensive judgment, the highest value of the target did not exceed 6.5 billion yuan, so the company gave up bidding.

In the expansion period, we signed 10 billion yuan in bank credit reserve expansion funds

Anning Co., Ltd. is mainly engaged in the mining, washing and sales of vanadium-titanium magnetite ore, and its main products are titanium concentrate and vanadium-titanium iron concentrate. In April 2020, Anning was listed on the small and medium-sized board of the Shenzhen Stock Exchange and was also the first listed company in Panzhihua City. As the actual controller of Anning Shares, Luo Yangyong holds a total of 72.071% equity of Anning Shares through Chengdu Zidong Investment Co., Ltd. and personal shareholding. According to the “2024 Hurun Global Rich List”, Luo Yangyong has a personal wealth of 9.5 billion yuan.

In the first three quarters of 2024, Anning achieved operating income of approximately 1.359 billion yuan, and achieved net profit attributable to the parent company of approximately 683 million yuan during the same period.

At present, my country’s titanium resources are mainly vanadium-titanium magnetite, mainly concentrated in the Panxi area, with a small amount distributed in Chengde, Hebei, Hanzhong, Shaanxi and other areas. The five major Kuangqu mining areas, including Panzhihua and Panjiatian, in the Panxi area, have a total resource reserve of nearly 10 billion tons. The most important mineral resource currently held by Anning shares is the mineral located in Panjiatian.

In the past two years, Anning has frequently mentioned its strategic goals of horizontally acquiring resources, vertically extending the industrial chain, and building an integrated mineral and materials enterprise. The refined minerals acquired this time belong to the same vein as the Panjiatian Iron Mine and can produce 2.6 million tons of mineral resources every year. Anning shares also believes that after the acquisition, the company’s resource reserves, business scale, market share, and profitability will be further improved.

As of the end of the third quarter of 2024, Anning’s asset-liability ratio was as low as 17.8%. The company has no long-term interest-bearing liabilities on its books. In the short term, the debt amount is controlled within 600 million yuan. Anning is not short of money. However, Anning shares are currently in an expansion period. In addition to acquiring resource reserves, Anning shares are also ensuring working capital.

On the day when the major asset reorganization was disclosed, Anning Postal Savings Bank Sichuan Branch signed a framework agreement, allowing the latter to provide the company with a credit line of no more than 15 billion yuan for comprehensive financial needs in the M & A, development, construction and operation of mineral resource projects. At the same time, Anning also signed an agreement with Bank of China Sichuan Branch, which will provide a credit line of no more than 10 billion yuan.

At the beginning of this year, Anning shares ‘2022 fixed increase plan was just implemented on January 10. The funds raised through this issuance of Anning shares are approximately 1.704 billion yuan. After deducting the issuance expenses, all of them will be used for an annual output of 60,000 tons of energy-grade titanium (alloy) material entire industry chain project.