After the acquisition of Serbon, where will Oriental Shenghong “turn”?

On December 22, Oriental Shenghong issued shares and paid cash to purchase 100% equity of Serbon and raised matching funds and related transactions were "unconditionally approved" by the China Securities Regulatory Commission's Mergers and Acquisitions and Reorganization Committee

The acquisition of Jiangsu Sierbang Petrochemical Co.

Dongfang Shenghong, whose main business is the "refining and chemical fiber" industrial chain, why is it focused on acquiring Serbon? What impact will this acquisition have on the company's development strategy and business performance?

Why buy Serbon?

In May of this year, Oriental Shenghong officially launched the reorganization of Serbon Petrochemical, a subsidiary of the same parent company

At the beginning of August of this year, Shenghong Group announced that it has carried out a major strategic adjustment, taking the lead in proposing a comprehensive strategic transformation in the industry to build a world-leading new energy and new material industry group, focusing on the national strategic direction and the "dual carbon" target requirements.

In this context, the injection of Serbang is particularly important

Taking photovoltaic-grade EVA resin as an example, Serbon is currently the largest manufacturer in China, and its customers include leading companies such as Foster and Haiyou New Materials

"From January to September this year, our photovoltaic-grade EVA output was 160,000 tons, which has surpassed last year’s output of 150,000 tons.

　　Regarding the strategic influence injected by Serbang, Oriental Shenghong recently stated on the investor interaction platform that once Serbang’s major asset restructuring is completed, the company will form a low-cost core raw material platform + new energy, new materials and other diversified industries.

　　The market is also optimistic about this major asset reorganization.

　　"New" Sheng Hong in Transition

　　Through the acquisition of Serbon, Oriental Shenghong's new business structure has gradually emerged

　　According to the analysis of Cinda Securities' research report, China's current import dependence of EVA for photovoltaic materials is close to 60%

　　In addition to photovoltaic material EVA, Serbon is building a propane industry chain and will also become the leading project in the industry chain of Shenghong's "double new" transformation strategy

　　At the same time, the propane industry chain project will become the first fully implemented project in Shenghong Group’s "Three Megaton Industrial Projects" plan, and will provide strategic support for the subsequent "chain extension" in the development of new energy, new materials, electronic chemistry, and biotechnology.

　　"Double chain + double wheel" is worth looking forward to

　　At present, Dongfang Shenghong is relying on the 16 million tons/year integrated refining and chemical project under construction to step up the construction of a world-class large-scale raw material guarantee platform for new energy and new material industrial bases

　　It is worth mentioning that Shenghong's industrial layout is a rare dual-chain model of "aromatics and olefins" in China.

　　Therefore, Serbon, as a domestic new energy high-end material supplier, will accelerate the layout of Dongfang Shenghong’s new energy industry.