Phoenix fly high! Caitong Securities helps the M&A Federation to build an M&A industry ecology

"Listing is the best transformation and upgrading of enterprises, and mergers and acquisitions are the fastest transformation and upgrading of enterprises."

As one of the most dynamic provinces in China's economy, Zhejiang has always been known as a large capital province and a large province of mergers and acquisitions. With the "Phoenix Action" plan as the program, from 2017 to 2020, Zhejiang has added a total of 190 new domestic listed companies, and the amount of IPO financing has reached 127.24 billion yuan. In terms of mergers and acquisitions, the mergers and acquisitions and restructurings led by zhejiang listed companies from 2017 to 2019 are at the forefront of the country in terms of the number of mergers and acquisitions transactions and the amount of mergers and acquisitions transactions, accounting for one-tenth of the proportion of mergers and acquisitions transactions in the country. In 2020, listed companies in the province completed a total of 283 M&A transactions, with a transaction of 148.5 billion yuan.

As the president of Zhejiang Mergers and Acquisitions Federation, Caitong Securities, a securities company in Zhejiang Province, plays a leading role in helping the "Phoenix Action" plan and promoting the high-quality development of listed companies, extensively linking resources and organically integrating the industrial chain, opening up a zhejiang practice under the wave of mergers and acquisitions.

Operation Phoenix is launched

The Zhejiang Provincial Mergers and Acquisitions Federation came into being

All along, Zhejiang businessmen have been good at making a fuss in small places. With a button and a pair of socks, Zhejiang businessmen can turn small business into a big global market. However, as China's economic development enters a new normal, Zhejiang's "low and small scattered" industrial pattern has encountered development bottlenecks.

Innovative technology, strengthening the brand, and improving the added value of products are the only way for enterprises and even industrial upgrading. Through the merger and acquisition of similar advanced enterprises, opening up the upstream and downstream industrial chains, and obtaining strategic resources and core capabilities from the outside, it has become an important means for Zhejiang enterprises to leapfrog and achieve curve overtaking.

In October 2017, Zhejiang Province officially released the "Phoenix Action" plan with the promotion of enterprise listing, mergers and acquisitions and restructuring as the core, proposing to use listed companies as a platform and mergers and acquisitions as a means to emerge a number of typical cases of accelerating enterprise development, technological breakthroughs and industrial upgrading through domestic and foreign mergers and acquisitions.

In order to take the new path of promoting development through mergers and acquisitions proposed by the "Phoenix Action", in March 2018, the Zhejiang Provincial Mergers and Acquisitions Federation (hereinafter referred to as the "Federation") came into being. As the first M&A service platform promoted by the provincial government in China, the Federation shoulders the mission of connecting listed companies, high-quality projects and professional institutions, and actively explores in integrating elements, creating ecology and promoting high-quality mergers and acquisitions.

Seize the opportunity of comprehensive opening up

Help create a high-quality M&A model

At the beginning of the establishment of the federation, Lu Jianqiang, president of the federation, secretary of the party committee and chairman of Caitong Securities, pointed out that enterprises still face many challenges in mergers and acquisitions, including fierce competition from global buyers for high-quality targets, regulatory review of Chinese enterprises' investment and mergers and acquisitions in Europe and the United States, and how to achieve post-merger integration plans and synergies.

In view of the four major problems of "project difficulty, financing difficulty, landing difficulty and integration difficulty" in the M&A market in the province, the Federation incarnated as a "financial disciple soldier", went deep into the front line to explore the needs of enterprises, and coordinated all parties to provide professional services. They set up a special service class, successively visited more than 400 listed companies in Zhejiang Province, such as Astronergy Electric Appliances and Juxing Technology, organized special research and other activities, sorted out nearly 1,000 pieces of information on effective M&A needs, provided more than 500 comprehensive services for mergers and acquisitions and restructuring for listed companies and related enterprises, provided M&A targets and professional advice for more than 50 listed companies, and assisted more than 10 listed companies in refinancing matters.

Under the new pattern of comprehensive opening up and the active promotion of the federation, Zhejiang enterprises have launched a larger-scale and more sustainable merger and acquisition feast.

In June 2018, The rotating chairman of the Federation, Juxing Technology, acquired the European company Lista Holding AG, helping Lista expand its market share in Europe while introducing the brand to China for localization.

In April 2019, Hailiang Co., Ltd., a member unit of the Federation, acquired 5 high-grade copper alloy rod manufacturers such as KMMB, and quickly grew into a leading enterprise in the global copper rod industry on the basis of being a leading enterprise in the global copper pipe industry.

In the same way, the federation has also frequently exerted its strength in promoting mergers and acquisitions.

In June 2018, global motor giant Wolong Electric successfully acquired the US GENERAL ELECTRIC business for US$160 million. EY, the vice president of the federation, was deeply involved in it, creating an annual classic for Zhejiang businessmen to acquire world-class enterprises across borders.

King & Wood Mallesons, vice president of the Federation, as legal counsel, fully participated in the major asset restructuring and M&A transaction of Century Huatong's acquisition of Shanda Games, which became one of the typical cases of the return of Chinese stocks.

Capital and technology go hand in hand, enterprises and governments, federations work together, Zhejiang enterprises are through mergers and acquisitions continue to grow bigger and stronger main business, and continue to extend to the upstream and downstream of the industrial chain, forming a more complete and powerful industrial chain system.

Give play to the role of the president unit

Strive to be the guide of mergers and acquisitions in the new era

According to the "Phoenix Action" new five-year plan (2021-2025), Zhejiang will strive to add more than 300 billion yuan in mergers and acquisitions of listed companies in five years, the number and amount of mergers and acquisitions will remain leading in the country, domestic mergers and acquisitions will be based on upgrading the industrial chain and value chain, and cross-border mergers and acquisitions will be based on obtaining import substitution technologies, talents and market resources. By the end of 2025, a number of listed companies will be formed in the forefront of global subdivision industries and domestic subdivisions through mergers and acquisitions.

"The development of the great change situation contains new forces, and the mergers and acquisitions of new forces will create a new era." Lu Jianqiang said that Caitong Securities, as a securities company in Zhejiang Province and the president of the federation, should take advantage of the momentum and not only be a promoter of mergers and acquisitions, but also a guide for mergers and acquisitions in the new era.

In April this year, Caitong Securities signed a memorandum of cooperation with the Federation as the chairman unit, and the two sides will carry out in-depth cooperation around the "Phoenix Action" upgrading plan and the action plan of the ten major industrial chain upgrading projects.

"On the one hand, Caitong Securities will continue to take the lead in organizing the 'Zhejiang Phoenix List' selection activities to tell the story of Zhejiang mergers and acquisitions; on the other hand, it will also be committed to building an industrial ecosystem that gathers mergers and acquisitions elements, promoting the benign development of Baishaquan's mergers and acquisitions of financial blocks, and making industrial mergers and acquisitions an important engine for Zhejiang to take the lead in building a new development pattern and achieving common prosperity."

According to reports, as of the first half of 2021, Baishaquan has acquired more than 620 enterprises in the financial block, the scale of the management fund has exceeded 190 billion yuan, the registered enterprises and shareholders' affiliated companies in the block have completed the acquisition of the actual control rights of A-share listed companies, and more than 4 participating enterprises have achieved domestic and foreign IPOs. At present, the neighborhood has entered a benign and rapid development stage, becoming an important source of mergers and acquisitions in Zhejiang and a "Zhejiang model" for the ecological aggregation of mergers and acquisitions industries.