Press Release

FCIB Acted as the Joint Lead Underwriter for Public Offering of Convertible Bonds of Tangshan Jidong Cement Co.,Ltd.

First Capital Investment Banking Co., Ltd (“FCIB”) acts as the joint lead underwriter for Tangshan Jidong Cement Co.,Ltd. (the “Issuer” or “Company”)’s public offering of Convertible Bonds (the “Bonds”) and successfully finished the offering on November 11, 2020. The total consideration is RMB 2.82 billion.

As the largest cement manufacturer in northern China, the issuer has a cement capacity that ranks the third among domestic cement manufacturing enterprises, and is one of the 12 large-scale conglomerates supported by the state to restructure cement products. In recent years, with the continuous improvement of the cement market and the accomplishment of the strategic restructuring of BBMG and Jidong Cement, the Company's performance has increased rapidly and its profitability has been significantly improved. In 2019, the company achieved a revenue of RMB 34.507 billion and a net profit of RMB 4.905 billion. The total consideration of RMB 2.82 billion is planned to be used for projects “Production capacity replacement of subordinates”, “Mine development and construction of ancillary facilities”, and “Waste co-disposal with the use of cement kiln”, which are of great significance to implement the national supply-side structural reform requirements, resolve the contradiction of overcapacity, and accelerate the transformation and upgrading of environmental protection.

This issuance is the first equity financing project after the reorganization of Jidong Cement and BBMG. Though the previous restructuring, the issuer obtained all the cement business of BBMG and became the cement business platform subordinate to BBMG. After the reorganization, the scale and profitability of the Issuer have climbed to a new level. With the improvement of cement industry and the recovery of market competition order, the Issuer is in pressing needs for more funds to grow. This issuance has raised a total amount of RMB 2.82 billion, which is the biggest equity refinance deals in the cement sector in recent three years, and also the largest scale of public offering of convertible bond issued by Beijing state-owned listed companies in recent ten years.

This issuance is also a positive attempt of refinance among the overcapacity industries. The cement sector belongs to the list, stipulated by the State Council's guiding opinions, of de-capacity and structural adjustment, and overcapacity is a lingering problem in the industry. The investment projects were designed by adhering a strict “no new capacity” policy, and taking capacity replacement and waste co-disposal by cement kiln as the breakthrough direction. These projects aim to realize structural adjustment of production capacity by replacing backward production capacity with advanced capacity, to realize harmless treatment of hazardous waste, solid waste and domestic waste by promoting co-disposal technology in cement kilns, and to enhance enterprise benefits. The proper orientation of the investment projects is an important basis for the projects to obtain the approval of relevant departments and for the “Bonds” to pass the review of CSRC.