Beijing Jianlong Group has unveiled plans to invest RMB 1.26 billion ($0.18 billion) in the acquisition of Xining Special Steel Co., Ltd., a Chinese special steel producer based in Qinghai Province. This acquisition will be executed through Jianlong Group's controlling subsidiary, Tianjin Jianlong Iron and Steel Co., Ltd., resulting in Jianlong Group holding a 29.95 percent stake in Xining Special Steel.
Xining Special Steel is primarily involved in the smelting, rolling, and processing of special steel, boasting a comprehensive production capacity that includes 750,000 metric tons of coke, 2.1 million metric tons of crude steel, and 2.0 million metric tons of finished steel. The company reported net profits of RMB 96 million and RMB 95 million in 2019 and 2020, respectively. However, it faced challenges in 2021 and 2022, recording net losses of RMB 1.147 billion and RMB 1.151 billion. In the first nine months of the current year, Xining Special Steel posted a net loss of RMB 1.166 billion.
Post-acquisition, Jianlong Group intends to infuse its high-quality special steel assets into Xining Special Steel at an opportune moment. The strategic move aims to propel Xining Special Steel to an annual crude steel production capacity of 10.59 million metric tons and a net profit target of RMB 4.271 billion by the end of 2028.
Presently, Jianlong Group boasts mining and beneficiation capacity of 44.3 million metric tons and crude steel smelting capacity of 42 million metric tons. In 2022, the group successfully produced 36.56 million metric tons of crude steel.
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