China Zhongji Investment completes targeted investment in "Shenhuo Shares"
Recently, China Zhongji Investment completed a targeted investment in Henan Shenhuo Coal and Electricity Co., Ltd. (hereinafter referred to as Shenhuo Shares, stock code: 000933). Shenhuo Shares is a key enterprise in Henan Province, focusing on the dual main businesses of coal and aluminum, and has formed a relatively complete coal-electricity-aluminum economic industrial chain.
Shenhuo Shares was established in August 1998 and listed on the Shenzhen Stock Exchange the following year. The company's main business is the production, processing, and sales of coal, alumina, and aluminum products, and has formed a relatively complete coal-electricity-aluminum economic industrial chain. As of the first half of 2020, the company controlled approximately 1.858 billion tons of coal reserves and 895 million tons of recoverable reserves; existing electrolytic aluminum capacity of 1.25 million tons (800,000 tons in Xinjiang Shenhuo, 450,000 tons in Yunnan Shenhuo), and 450,000 tons of capacity under construction (Yunnan Shenhuo) is expected to be completed and put into operation in March 2021.
In recent years, Shenhuo has continuously optimized its electrolytic aluminum business, gradually shutting down electrolytic aluminum production lines with higher costs in Henan Province. All current production capacity has been transferred to Xinjiang Shenhuo and Yunnan Shenhuo, and both are compliant and effective capacity. Benefiting from electricity costs, Xinjiang Shenhuo has a significant competitive advantage. Yunnan Shenhuo has an even more significant market competitive advantage due to its location near raw material production areas and major consumer markets, as well as low-cost hydropower and lower electricity costs due to local policies.
