Anyang Iron and Steel controlling shareholder mix reform low-key industry analysis: more than expected to be completed by the end of next year at the earliest

Anyang Iron and Steel Group Co., Ltd. (hereinafter referred to as Anyang Iron and Steel Group) mixed ownership reform is in low-key progress. Jiangsu Shagang Group Co., Ltd. (hereinafter referred to as Shagang Group) and Angang Group signed a mixed intention agreement a few days ago, but a number of industry people told the Financial Associated Press that the intention agreement "exceeded expectations."

However, exceeding expectations also means that Henan iron and steel industry will enter the mixed reform deep water zone. In an interview with a reporter from the Financial Associated Press, it was found that issues such as personnel placement, asset evaluation, and mixed reform methods may become the focus of tackling key problems. According to the analysis of people in the industry, even if the mixed reform goes smoothly, it is expected that the mixed reform plan will be released as soon as the end of this year, and the overall mixed reform will be completed by the end of

Analysis: there are many uncertain factors in mixed reform, which will be completed by the end of next year at the earliest.

According to Tianyan investigation, Anyang Iron and Steel Group is an enterprise directly under the control of the Henan provincial government, with a registered capital of 3.132 billion yuan, with 49 overseas investment companies, and is the controlling shareholder of A-share listed company Anyang Iron and Steel (600569.SH) and the new third board listed company Anyang Iron and Steel Software (870730.OC). Shagang Group has a registered capital of 4.5 billion yuan and invests in 112 companies, and the actual controller is Shen Wenrong. According to the announcement, Shagang Group intends to participate in the mixed reform of Anyang Iron and Steel Group, and become the controlling shareholder of Anyang Iron and Steel Group, the two sides have signed a mixed reform intention agreement.

"the release of this mixed reform is beyond imagination," an investment banker close to Anyang Iron and Steel Group who had participated in the mixed reform of Henan state-owned enterprises told the Financial Associated Press. Among the provincial state-owned enterprises, Anyang Iron and Steel Group is a relatively high-quality state-owned asset. Henan's willingness to cede control is slightly unexpected. After the release of the mixed reform news, the above investment bankers have communicated with the senior executives of Anyang Iron and Steel Group, but the information disclosed to the public at this stage is limited, and the mixed reform timetable has not been mentioned for the time being.

In the view of the investment bank, according to usual experience, from the aspects of asset evaluation, agreed plan, and decision-making process, the mixed reform plan is expected to be announced at the end of this year, but it will be completed relatively quickly by the end of next year. However, the investment bank stressed that the mixed reform is related to the ownership of state-owned property rights and other deep-seated institutional reform, there are many uncertain factors, the specific situation depends on the ideas of the senior level in Henan Province.

Another person in the financial industry who is familiar with Henan SASAC agrees with the view that "exceeding expectations". He believes that Anyang Iron and Steel Group is an old state-owned enterprise at the department level, and the uncertainty of mixed reform lies in people, executives, front-line workers, retired workers, and so on. Dissent from either side may affect the process of mixed reform, or even the failure of mixed reform.

Coincidentally, just a week after the announcement of the mixed reform of Angang, on May 19, Wang Kai, acting governor of Henan Provincial Government, went to the Provincial SASAC to investigate and preside over a forum, emphasizing the need to seize the window and opportunity period for the reform of state-owned enterprises, deepen the reform of mixed ownership, and promote the strategic restructuring and professional integration of state-owned enterprises.

Front line: personnel placement may be difficult, individual Angang employees are worried about being laid off

"assets evaluation is nothing more than a matter of high and low, and the bottom line is that there is no loss of state-owned assets, but the placement of personnel is difficult to control, and no one knows what the employees really think." According to the above investment bankers, there is a strict process for the restructuring of state-owned enterprises, and the mixed reform plan must be voted on by the employee Congress and approved by more than 2% of the employee representatives.

According to the existing system of Anyang Iron and Steel Group, all enterprise personnel can be roughly divided into provincial administrative cadres, enterprise managers, grass-roots employees and retirees, among which provincial administrative cadres are appointed by the Organization Department of Henan Provincial CPC Committee and have corresponding administrative levels. enterprises hire managers and grass-roots employees to sign labor contracts.

The above-mentioned people in the financial industry said that the mixed reform is expected to have little impact on contract personnel, and issues such as the departure or retention of provincial administrative cadres and identity transformation need to be agreed by the relevant departments. If the provincial administrative cadres of Anyang Iron and Steel Group have no administrative level after the mixed reform, it is equivalent to the end of their official career.

In history, the provincial administrative cadres of Anyang Iron and Steel Group have a precedent of "business but excellence is official": Shi Jichun, former general manager of Angang Group, was directly promoted to vice governor of Henan Province, and Li Tao, former chairman of Angang Group, was transferred to director of Henan State-owned assets Supervision and Administration Commission. Li Tao is now director of the Henan Provincial Department of Industry and Information Technology.

The grass-roots employees of Anyang Iron and Steel Group have different reactions to the mixed reform. On May 20, a reporter from the Financial Associated Press visited Anyang Iron and Steel Group and found that personnel and vehicles went in and out normally, and production and operation were not affected. Some grass-roots employees of Anyang Iron and Steel Group said that now the internal discussion is heated, mixed reform is definitely a trend, but the specific how to change, the superior leadership did not specify.

In addition, employees of a subsidiary of Anyang Iron and Steel Group said that leaders pay more attention than employees, after all, it is unknown whether the leadership position can be retained; there are also employees who are not only looking forward to a pay rise after mixed reform, but also worried about being laid off after mixed reform.

For Anyang Iron and Steel mixed reform of many questions, Anyang Iron and Steel Secretary responded that "everything is subject to the announcement."

Extension: the mixed Reform of Anyang Iron and Steel reflects the dispute over the leading right of Regional Integration in the Iron and Steel Industry

According to previous expectations, Henan iron and steel industry consolidation will be carried out through two lines of Anyang Iron and Steel Group and Shagang Group, with the former representing local state-owned assets and the latter representing high-quality private enterprises, according to the investment bankers.

The Action Plan for the Transformation and Development of the Iron and Steel Industry in Henan Province (2018-2020) points out that two large-scale iron and steel enterprises will be integrated and built by 2020. In November last year, the party and government delegation of Henan Province went to Nanjing to discuss with Jiangsu entrepreneurs. Shen Wenrong, chairman of Shagang Group, said at the meeting that he actively participated in the integration and reorganization of the iron and steel industry in Henan Province. Henan Iron and Steel holding Group Co., Ltd., which is 100% controlled by Anyang Iron and Steel Group, was registered and established on April 28, with a registered capital of 3.6 billion yuan.

In fact, as early as 2007, Shagang Group reorganized Henan Anyang Yongxing Steel Company into Shagang Group Anyang Yongxing Special Steel Co., Ltd. (hereinafter referred to as Shagang Yongxing). In November last year, Anyang City signed a steel industry integration and reorganization project with Shagang Group. The project was implemented by Shagang Group with an investment of 14.8 billion yuan, and Shagang Yongxing was responsible for its implementation. After the completion of the project, the steelmaking capacity will reach 5.5 million tons. At noon on May 20, a reporter from the Financial Associated Press learned from the merchants near Yongxing of Shagang that there are about 4000-5000 people in Yongxing of Shagang at present.

The above-mentioned people in the financial industry said that the mixed reform of Angang "exceeded expectations" and "great uncertainty" was related to the dominance of private enterprises, while in recent years, the restructuring of the domestic iron and steel industry took the central enterprise Baowu Group as the protagonist. Although large private steel enterprises such as Jingye Group, Jianlong Group, Fangda Group and other large private steel enterprises have made actions, their integration is weaker than Baowu Group, at a time when new production capacity in the iron and steel industry is limited and industry concentration urgently needs to be improved. There is a certain degree of competition between state-owned enterprises and private enterprises in merger and reorganization.

In addition to the mixed reform of Angang in Henan, other regions are also promoting the consolidation of the steel industry, such as Jiangxi Province, where in November last year the Jiangxi Provincial Bureau of Industry and Information Technology expressed its support for the merger and restructuring of Fangda Group. On May 18 this year, Liu Jianrong, chairman of Chongqing Iron and Steel (601005.SH), was transferred to the post of chairman of Xingang Group. Tianyan check shows that Xingang Group is an iron and steel group under Jiangxi State-owned assets Supervision and Administration Commission, as well as a controlling shareholder of Xingang (600782.SH).