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Along with military promotion strategy and comprehensively deep reform, a new round of reform in the military industry field starts.
China South Industrial Group Corporation (CSGC) formulates a pilot preliminary scheme of mixed ownership reform for military enterprises, determines four pilot institutions, and explore ways to implement stock incentive plan for automobile industry; meanwhile, it also carries out capital operation based on “2+4” advanced military and modern industrial system, China Securities Journal reported on August 9.
New step for mixed ownership
The CSGC takes a new step for mixed ownership reform. Recently, major assets restructuring of China Jialing Industrial Co., Ltd. (Group) (600877.SH) has been initiated to gradually deal with insufficient drives of some industrial enterprises, and Chongqing Jialing Industrial Co., Ltd. is newly established. Chongqing Changan Industry (Group) Co., Ltd. and KUKA Robotics GmbH are also pushed to build up an intelligent equipment joint venture company to be one of the first movers developing industrial robots.
As the first central state-owned enterprise (SOE) to launch stock incentive plan, Chongqing Changan Automobile Company Limited (000625.SZ) passed proposals, including Deliberation on Its Stock Option Incentive Plan (Draft) and Summary, in the second meeting of the 7th board of directors held on March 30, 2016, according to its related officer. The listed company received formal reply about review & approval opinions from the State-owned Assets Supervision and Administration Commission (SASAC) in July 2016. It will revise the said plan based on the latest SASAC opinions, hold meetings by board of directors and shareholders for deliberation, and submit the materials to stock exchange and SASAC for filing. After that, the stock incentive plan will formally step into implementation.
Chongqing Jianshe Industrial (Group) Co., Ltd. under the CSGC firmly promotes three major measures of military reform, mixed ownership and military & civil integration to speed up assets clearing-up, boost enterprises in favorable development, and carry out multi-aspect cooperation with Chongqing Municipal Government, National University of Defense Technology (NUDT) and excellent private enterprises through merging and restructuring with another similar enterprises. Jianshe Industrial forms its own product series and gains profit from single product system and serious losses.
Capital operations frequent in industrial system
In order to push the state-owned capital further concentrating towards main industries, the CSGC is making effort to reinforce the excellent military industries, optimize and power automobile industry, with strength focusing on four fields, such as power transmission & transformation, equipment manufacturing, photoelectric information and financial service. It devotes itself to “2+4” advanced military and modern industrial system, and also carries out capital operations based on this system.
The group is continuously intensifying the internal resources’ integration, merging and restructuring two firearms manufacturers, and systematically improving the overall R&D capability, which gains ideal effect of “1+1>2”; it positively promote the resource integration of cannonball bases in Southwest China, constantly optimize the capability and deployment of scientific research production in the military field; military subsidiaries actively conduct horizontal cooperation, and jointly build up a R&D center with NUDT; the CSGC also cooperates with leading private enterprises, including Wuhan Guide Infrared Co., Ltd. (002414.SZ) and Xiaolong Auto Co., Ltd., to jointly demonstrate and develop new weaponries, related manager at the CSGC introduced. Through great effort for core military building capability, the involved military field now has preliminarily formed systematic development ability.
Additionally, a series of capital operations greatly support the development of military products and main automobile businesses. Equity of Changan Minsheng APLL Logistics Co., Ltd. (01292.HK) is optimized through private placement of Changan Automobile. Industrial structure adjustment for power transmission & transformation is intensified by assets injection of Baoding Tianwei Baobian Electric Co., Ltd. (600550.SH). Motorcycle industry is boosted to get out of difficulties by reducing shareholdings and equity transfer, and the capital backflow accumulated at 1.8 billion yuan in the first half year. Skywell Group with its asset far less than debt is promoted to bankrupt and restructure. Sub-industrial control and management for power transmission & transformation and new energy industries has achieved substantial progress now. Motorcycle industry with serious overcapacity is incented to reduce burden, and get out from difficulties, with intensified restructuring effort to positively vitalize the stock resources. Strategic cooperation with Ford China is deepened. Restructuring with an enterprise with serious losses, Harbin Hafei Automobile Industrial (Group) Co., Ltd., is focused on and finished to greatly promote the prosper of automobile base in Northeast China.
(APD/XH FINANCE)
