Jiugang Hongxing Intends To Raise Private Placements By Private Placement 9 Billion 600 Million

Jiugang Hongxing (600307.SH) announced on the 24 day that it would not exceed 1 billion 86 million shares in private placement at a price not exceeding 8.84 yuan / share, raising 9 billion 600 million yuan for the reconstruction and purchase of stainless steel assets in the earthquake stricken area.

The company said that from the demand for steel, the demand for steel for post disaster reconstruction is huge.

Therefore, the 5 billion 277 million yuan will be used for Yu Gang to support the reconstruction and reconstruction project of the earthquake stricken area. The project will be built for two years. After the project is put into operation, the design will produce 600 thousand tons of H steel, 600 thousand tons of hot rolled ribbed bars and round steel.

In addition, the company will acquire a 100% stake in Tianfeng Stainless Steel Co., Ltd. (hereinafter referred to as the stainless steel company) of the Jiuquan iron and Steel Group under the price of about 4 billion 300 million yuan.

As of November 30, 2010, the total assets of the stainless steel company were 12 billion 600 million yuan, the owner's equity was 3 billion 200 million yuan, and the operating income from 2010 to November was 8 billion 800 million yuan and the net profit was 240 million yuan in 2010.

Xiangcai Securities said that after the reorganization of the group's mines and common steel assets in 2009 through the reorganization of major assets, Jiugang Hongxing has formed a complete modern steel industry chain, but the relevant stainless steel assets remain in the group.

After the acquisition of the shares of the stainless steel company, the related assets of the group will be completed as a whole.

According to the results of the report, the three quarter of Jiusteel Hongxing achieved operating income of 9 billion 435 million yuan, down 24.26% compared with the same period last year, net profit 435 million yuan, up 177.07% over the same period last year.

Liu Yuanrui, an analyst with Changjiang Securities, believes that in general, the issuance plan is well regulated.

As the specific implementation date of the scheme has not yet been determined, it will not be considered for the time being. It is expected that the EPS of the company in 2010 and 2011 will be 0.51 yuan and 0.70 yuan respectively.

On Friday, Jiuxing iron and Steel Co. Ltd. opened up and left low, closing at 10.02 yuan / share, up 1.52%.