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25 OCTOBER 2018 AL CIRCLE

China Baowu plans an investment in aluminium-magnesium alloy company

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

Yunhai Metal’s listed company reportedly declared that the company’s controller Mei Xiaoming would like to transfer part of its shares to Baosteel Metal, a subsidiary of Baowu, to which Yunhai will also entrust part of the voting rights. Market participants see this transaction as Baowu’s intention to expand its market shares in a new materials sector and strengthen its position as an automotive sheet supplier, Kallanish notes.

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According to the announcement, the control of the company may change after the completion of the transaction process.

The purpose of this transaction is to accelerate the strategic layout of the company and promote the application of light alloys. However, a formal agreement has not been signed yet.

Yunhai Metal’s primary products include aluminium and magnesium alloys that are widely used in 3C and automotive industries. Last year, Yunhai Metal’s operating revenue was CNY 4.9 billion (US$710 million) and its net profit was CNY 150 million. Out of this total revenue, aluminium alloys account for the half while magnesium alloys account for a quarter.

Last year, Yunhai Metal had signed a strategic cooperation agreement with BAIC Group to jointly develop aluminium and magnesium alloys for the automotive industry.

Baosteel’s listed company, another subsidiary of Baowu, said last week that the company had been actively tracking the automotive aluminium industry intending to enter it at some stage. This action is intended to meet the needs of automotive customers for aluminium applications.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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