Shenyang Machine Tool Expands High-end Business and Makes Great Changes

On September 25, Shenyang Machine Tool announced the Non-Public Issuance of Stock Preplans (Revised Draft). The company plans to issue additional 220 million shares at a price of not less than 5.58 yuan per share. Among them, the controlling shareholder Shenyang Machine Tool (Group) Co., Ltd. will subscribe for 10% of the shares issued this time.

For additional issuance issues, Zhang Jinglong, Director of Shenyang Machine Tool, told the Securities Times reporter: “The market demand for high-end products in the machine tool industry has not only been reduced due to the macroeconomic slowdown, but has even increased. The company’s issuance of additional funds is mainly used for investment. The high-end, technologically-advanced product projects are in line with the industry's future development trends and are of great significance to Shenyang's machine tools."

Semi-annual report of Shenyang Machine Tool shows that the company’s operating income for the first half of the year was 4.203 billion yuan and its operating profit was 46 million yuan. According to statistics, in the first half of this year, the total operating income of 11 listed companies in China's machine tool industry was 7.809 billion yuan, with a total operating profit of 127 million yuan. Shenyang machine tools accounted for 58.32% and 36.22%, respectively, and the industry's leading position is very stable.

The semi-annual report of Shenyang Machine Tool also showed that in the first half of the year, the domestic and foreign economies had declined. The company's comprehensive gross profit margin was 24.26%, which was an increase of 2.58 percentage points over the same period of last year.

Zhang Jinglong stated that the reasons for the year-on-year increase in the gross profit margin of Shenyang Machine Tools in the first half of the year are twofold. First, the increase in gross profit of the company's ordinary machine tool product mix has increased. Second, the significant reduction in steel prices in the first half of the year has reduced the company's production costs.

At present, China's machine tool industry is facing transformational pressure. It is only possible to open up mid-to-high-end markets and increase the research, development, and production of middle-to-high-end CNC machine tools and their functional components to gain an advantage in future competition. Shenyang Machine Tool Co., Ltd. plans to invest 5 projects in this fundraising, including major CNC machine tool production base construction projects, CNC lathes, and vertical horizontal machining centers for technological transformation and expansion projects.

From the perspective of the contents of the raised investment projects, the company is actively increasing the production of mid- to high-end machine tool products in order to prepare for the future industry competition through the adjustment of product structure and open up new profitable space. It is estimated that if all the investment projects are successfully put into production, the annual output value of the products brought by the project will be nearly 6.4 billion yuan.

In addition, the enterprise information transformation project in the fund-raising project has attracted special attention. The company plans to build a digital collaborative design platform and a management information platform to realize the "three-in-one" logistics, information flow and capital flow, which will effectively shorten the product design and development and manufacturing cycle. Zhang Jinglong said: "The investment in this project is not large, but the indirect benefits generated through the investment in this project are enormous."