China Zhongji Investment completes a targeted investment in the Hebei listed company, Sitong New Materials.
Recently, China Zhongji Investment completed a targeted investment in the Hebei Province listed company, Sitong New Materials (stock code: ) 300428). Sitong New Materials (full name "Hebei Sitong New Metal Materials Co., Ltd.") was established in 1998 and is China's largest manufacturer of intermediate alloys and grain refining products. The company is located in Baoding City, Hebei Province, and was listed on the Shenzhen Stock Exchange's ChiNext board on March 19, 2015.
Sitong New Materials modern factory area
In 2018, the company acquired Tianjin Lizhong Group Co., Ltd. through a share issuance. Lizhong Wheel was founded in 1995 and was initially invested and built by Hebei Lizhong Nonferrous Metals Group (founded in 1984). In 2005, it was listed on the main board of the Singapore Exchange. Lizhong Wheel is one of the largest aluminum alloy wheel manufacturers in China.
After acquiring Lizhong Wheel, Sitong New Materials further expanded its market share and consolidated its strong position in China's domestic automotive wheel hub market.
The funds raised by Sitong New Materials in this additional issuance are mainly used for Industry 4.0 smart factory transformation, and expansion projects for aluminum alloy wheels and high-strength aluminum suspension components.
Yang Xiaoying, managing director of China Zhongji Investment, introduced that they highly recognize the use of the funds and future prospects of Sitong New Materials' additional issuance. This is the fundamental reason for their participation in the additional issuance investment. In addition, they considered the following factors:
1. Leading position in the industry.
Sitong New Materials is one of the largest aluminum alloy wheel manufacturers in China. It holds a large market share in both domestic and international OEM markets. Customers are relatively stable and there is no serious dependence on a small number of customers, and the development prospects are very good.
2. Clear market strategy layout.
The company shows a globalized development trend in market development and customer development; against the backdrop of the global automotive industry chain shifting to developing countries and regions, seizing opportunities, it has achieved a business market layout supporting mid-to-high-end auto factories domestically, and in overseas markets, it has completed a business market layout covering North America, Europe, and Asia-Pacific, ultimately forming a strategic market layout with foreign sales accounting for approximately 45%.
3. High-quality customer resource base.
Currently, the company has already supplied parts to many well-known domestic and international automakers. A high-quality and abundant customer base is conducive to improving profitability and risk resistance, and enhancing the company's development potential.
4. Core technology advantages.
The company has always focused on breakthroughs in core technologies in the automotive aluminum alloy wheel industry, and attaches great importance to independent research and development and technological innovation.
Sitong New Materials has the industry's leading R&D center and talent team.
Yang Xiaoying introduced that China Zhongji Investment's additional issuance for Sitong New Materials secured a high "margin of safety." Against the backdrop of good expectations for the development of China's economy and capital market, this additional issuance project is expected to bring safe and stable returns to investors.
Wen Yuanhua, president of China Zhongji Investment, introduced that in the future, China Zhongji Investment will also explore more Tier 1.5 market businesses, such as additional issuances, mergers and acquisitions, and asset restructuring. Sitong New Materials is one of the typical cases where China Zhongji Investment uses the power of capital to promote industrial upgrading and help local private enterprises develop rapidly. China Zhongji Investment hopes to cooperate sincerely with all sectors of society to do things that benefit the country and the people, and achieve win-win results.
