Asia Cement (China) Holdings Corp (亞洲水泥中國控股), the Chinese unit of Taiwan’s second-biggest cement maker, yesterday said it has reached a share purchase deal with Sichuan Lanfeng Cement Co (四川蘭豐水泥), two days after the company issued a positive profit alert for the previous quarter.
In separate filings with the Hong Kong Stock Exchange, Asia Cement (China) said it had acquired 100 percent of the equity interest in Sichuan Lanfeng for 2.005 billion yuan (US$322.25 million) through its wholly owned subsidiary Sichuan Yadong Cement Co (四川亞東水泥).
“Upon the completion of the acquisition, Sichuan Lanfeng will become a wholly owned subsidiary of Sichuan Yadong,” Asia Cement (China) said in the filing.
The proposed acquisition, which was first revealed by Asia Cement (China) on April 3, is still pending approval from authorities.
The company expects to close the deal by May 31, the filings showed.
Sichuan Lanfeng Cement operates two new dry process production lines, with a total output of 5 million tonnes a year, in Pengzhou City in Sichuan Province.
Credit Suisse AG said the deal would allow Asia Cement (China) to become the largest cement producer in Chengdu with an annual capacity of 11 million tonnes, or a market share of up to 45 percent, from 6 million tonnes.
The company’s overall annual production in China is to rise to 35 million tonnes following the latest transaction.
“We view Asia Cement China’s planned acquisition of Sichuan Lanfeng Cement as a positive move to enhance its market position in Chengdu,” Credit Suisse AG’s Taipei-based equity strategist Jeremy Chen (陳建名) said in a client note.
“The acquisition will bring Asia Cement (China) a step closer to its capacity target of 50 million tonnes per year by 2015,” Chen said.
Asia Cement Corp (亞洲水泥) has an annual capacity of 5.5 million tonnes in its Taiwan operation and a combined 30 million tonnes capacity from its operations in Jiangxi, Hubei and Sichuan provinces in China.
Analysts said that the company has become more aggressive in its China business over the past two years as it aims to take advantage of rising cement demand from China amid Beijing’s urbanization push.
In early January, Asia Cement and the Chinese subsidiary signed a strategic partnership agreement with Anhui Conch Cement Group (安徽海螺水泥股份) and China Conch Venture Holdings Ltd (中國海螺創投) to develop environmentally friendly production methods and lower production costs, while working together to penetrate new cement markets around the world.
On Monday, the Hong Kong-listed Asia Cement (China) said in a filing to Hong Kong Stock Exchange that its first-quarter net profit would be more than 1,300 percent higher than the 8.5 million yuan a year earlier, attributing the earnings surge to an increase in average selling price and a decline in coal costs during the period.
Asia Cement (China) is scheduled to release its financial results for the first quarter by the end of this month.
Hua Nan Securities Investment Management Co (華南投顧) analyst Henry Miao (苗台生) said the latest acquisition showed that Asia Cement is gearing up to buy assets in the Chinese market.
“I expect Asia Cement to announce more deals,” Miao said.
Asia Cement could report about NT$2.5 in earnings per share for this year on a consolidated basis, up from NT$2.12 posted a year earlier after taking the profit alert of Asia Cement (China) into account, he said.
Shares of Asia Cement fell 0.13 percent to NT$39.35 in Taipei trading yesterday, while Asia Cement (China) shares rose 0.45 percent to HK$6.63.
Additional reporting by CNA
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”