Shagang’s downsizing and restructuring successfully prevented the transition from collapsing
Sina Finance News On the first trading day of the new year, Shagang Co., Ltd. ushered in the first daily limit of this year, and has also hit a new low.
Final release, report 7.
23 yuan / share, down 9.
This is the fifth daily limit of Shagang since the resumption of trading on November 16, 2018.
The final close, Shagang shares plunged 55 since the resumption of trading.
23%, cut from a high of 16 yuan.
The success of the reorganization was difficult to stop. The previous major asset reorganization was planned for the second time. Shagang was suspended from trading on September 19, 2016, and resumed trading on November 16, 2018. The period exceeded two years.
In November 2018, Shagang issued a trading plan (revised draft), claiming to acquire 100% equity of Suzhou Qingfeng for $ 23.7 billion.
Shagang’s main business is iron and steel. Through reorganization, listed companies will introduce data center business to form dual main businesses. If the reorganization is successful, this will also be the largest cross-border reorganization of listed companies in the same industry in 2018. The restructuring transaction is currently pending auditAfter the evaluation is completed, it shall be submitted to the board of directors for further progress.
It is understood that the acquisition of Suzhou Qingfeng by Shagang is optimistic that the company holds a 51% stake in Global Switch.
Global Switch is the world’s second largest wholesale data center provider, with a global market share of 7.
In 2016, 2017, and the first half of 2018, the global Switch net profit was 4 respectively.
3.0 billion pounds, 3.
￡ 3.3 billion, ￡ 83.5 million.
As of December 31, 2016, the book value of 100% equity of GS was approximately 258.
85 billion, with an estimated value of 430.
83 billion, with a value-added rate of approximately 166.
Behind the high premium estimate, GS revenue and net profit and other performance data are falling.
From 2015 to 2016, the revenue was from 33.
3北京夜网.1 billion yuan fell to 32.
9.8 billion yuan, with a net profit of 40.
RMB 9.2 billion dropped to 36.
RMB 0.5 billion.
During the suspension period, although the broader market has experienced a part since 2018, the overall decline is much smaller than that of Shagang, which is only 18%.
This shows that the decline in Shagang’s shares is more caused by the uncertainty of the future earnings of its restructuring target and the pessimism expected by investors.
Suspicious GlobalSwitch due to the audit, the evaluation has not yet been completed. The revised draft of the reorganization plan provides only a brief consolidated statement, but there is a set of data that is important: as of June 30, 2018, the closing balance of the investment nature of Global SwitchThey are 468.
07 billion, accounting for 93% of total assets.
In addition, the company’s inventory, cash and cash equivalents, accounts receivable, intangible assets, and fixed assets were 0.
1.7 billion, 13.
6.8 billion yuan, 18.
6.6 billion, 0.
2.1 billion and 0.
After comparing the data, investors will consider this a real estate company.
Ongoing, the restructuring report is outspoken, using GlobalSwitch’s main assets as operating property, and the remaining 11 data centers have an area of 34.
06 thousand square meters, including Hong Kong and Singapore, a total of four.
70,000 square meters are long-term lease income.
Based on the closing value at the end of June 2018, the average price of Global Switch properties is 13.
740,000 yuan / square meter.
Since the revised draft of the reorganization plan did not provide the location and address of the relevant property, the outside world could not obtain relevant details.
Investment real estate is commonly found in real estate listed companies and department stores. Among them, stable department stores will adopt the cost model for measurement, with normal depreciation, while real estate held by real estate listed companies is active due to the existence of similar properties near the properties held.Quotation, so fair value measurement is reasonable.
As a data center operator, Global Switch signs receiver room agreements with relevant tenants and telecommunications operators or Internet service providers, thereby providing tenants with services directly connected to telecommunications operators or Internet service providers. Its business modelIt mainly collects rents from data center tenants. Rental income accounts for 70% of its operating income. It is recognized that investment real estate has its rationality, but it can be very aggressive at fair value.
Global Switch properties are proprietary and are not comparable to surrounding housing prices. It is appropriate to use surrounding housing prices as a fair value reference to measure substitution. It is advisable to use a method of forecasting future rental cash flow and final disposal to review its operating real estate.value.
As of June 30, 2018, Global Switch’s deferred tax is 80.
The revised draft of the restructuring plan of 4.8 billion US dollars explained that basically the main assets of Global Switch are investment real estate held by it, which is measured at fair value. According to the difference between audit and accounting, the fair value of investment real estate changes.The profit or loss portion should be recognized in the financial statements accordingly.
As the revised draft of the reorganization plan did not disclose the specific rate of return or the specific amount of deferred tax due to changes in the fair value of real estate, it is assumed that the compensation is 25% and that all deferred tax will be brought to the recognition of investment real estate, and preliminary calculationsThe cumulative amount of changes in the fair value of investment real estate exceeds US $ 30 billion, and the change in owner’s equity caused by this floating profit may exceed US $ 20 billion, and the total shareholder equity of Global Switch extended to June 30, 2018 is 296.
With a gross value of 6.8 billion US dollars, the gross surplus of Net Switch ‘s investment assets and the actual net assets of its surplus are about 10 billion, and the valuation of Global Switch in this transaction is 460.
6.2 billion, estimated to be close to 5 times PB.
There is no precedent for such accounting in comparable companies.
At present, among the A-share listed companies is Halo New Network (300383.
SZ) and Dataport (603881.
(SH) owns IDC business, but its investment real estate returns to zero at the end of each period. Operating properties are depreciated and amortized as fixed assets. The revised draft of the reorganization plan provides Equinix, Digital Realty, Interxion Holding NV, Cole-MarkHolding 4 companies, only Digital Realty separately listed real estate property-related assets, but the company uses the cost method to calculate, there is normal depreciation and amortization.
Is business property so important?
IDC business is mainly to build computer rooms and lease them to IT companies, telecommunications companies and other customers. Generally speaking, it involves the conversion of energy and land. The original data center of Halo New Network was located in Dongzhimen, Beijing, and then to non-core areas such as Jiuxianqiao and YizhuangExpansion, the company’s business has not been affected, and a large number of internal data centers are built in Guiyang, Hohhot and other places with relatively low power costs.
Is the situation very different abroad?
However, DigitalRealty also stated in its annual report that energy consumption is the decisive factor for the company’s success.
Under the cover of a unique investment real estate accounting measurement, GlobalSwitch provided beautiful financial data to the outside world, distorting the balance sheet and profit and loss account.
First, the floating profit caused by fair value measurement has beautified the company’s balance sheet.
From 2015 to 2017, the total assets of Global Switch were 431.
06 billion, 446.
1.8 billion and 521.
4.9 billion yuan, with total debt of 184.
9.8 billion yuan, 187.
3.2 billion and 227.
8.1 billion, the asset-liability ratio has never exceeded 50%.
Since all operating assets were measured at fair value, depreciation and amortization costs were avoided, and this was initially gradually reduced, which saved about 4 billion to 500 million US dollars in expenses, which inflated an operating profit of 400 million to 500 million US dollars.To a certain extent, it also caused Global Switch to exceed the industry average level of operating profit.
From 2015 to 2017, Global Switch achieved operating income33.
3.1 billion, 32.
9.8 billion and 32.
8.4 billion, with a gross profit of 23.
9.2 billion, 23.
5.7 billion and 23.
US $ 6.6 billion, operating profit excluding real estate fair value changes was 22.
9.9 billion, 22.
7.2 billion and 23.
01 billion yuan, operating profit 69%, 68.
9% and 70.
These figures make it hard for industry leaders to look beyond their reach.
Equinix, which has the largest revenue, terminated its total assets at the end of 2017 at 186.
$ 9.1 billion, with a total debt of 118.
$ 4.2 billion, with asset-backed debt of 63.
4%; In 2017, the company achieved operating income of 43.
6.8 billion US dollars, realized operating profit8.
$ 4.8 billion, with an operating margin of only 19.
Shagang selected 6 A-share and U.S.-listed companies to compare the price-earnings ratio and P / B ratio to prove that the 100% equity allocation of Global Switch is not expensive at 46 billion U.S. dollars.Profit, this PB method does not truly reflect the high premium of Global Switch.
From the data point of view, the growth of Global Switch is far behind the industry average, and the high premium is not convincing.
From 2015 to 2017, the operating income of Global Switch was 3 in pounds.
49 billion, 3.
6.8 billion and 3.
7.7 billion pounds, an increase of about 8% in 2017 compared to 2015. During the period under consideration, the company’s operating area increased from 300,000 square meters to 34.
05 thousand square meters, this growth rate is already very low.
The revised draft of the reorganization plan states that the profit commitment period of the GlobalSwitch for this transaction is three years, starting from the fiscal year when the underlying assets are completed.
The performance compensator promises that in 2018, 2019, 2020 and 2021 (the actual start year of the performance commitment period will be the year of the underlying asset delivery date), the net profit realized by Global SwitchGains and losses on changes in fair value of property real estate, exchange losses and gains, and other non-recurring gains and losses attributable to the parent company ‘s net profit are not less than 2.
0.4 billion pounds, 2.
5.9 billion pounds, 3.
￡ 0.7 billion and 3.
5.3 billion pounds, and not less than the predicted net profit margin corresponding to GlobalSwitch listed in the “evaluation report” issued by the evaluation agency in this transaction.
From 2015 to 2017, Global Switch’s operating profit from the replacement of fair value changes in real estate was 2 respectively.
41 billion, 2.
54 billion and 2.
6.4 billion pounds, taking into account the high blood pressure factor, its deducted non-net profit is about 200 million pounds, how to achieve performance commitments will become a very realistic issue.
(Part of the article comes from Public Securities News, Securities Market Weekly)