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Does the Boshen tool fundraising project regenerate to cope with anti-dumping or is demand falling?
On May 31, Boshen Tools (002282, closing price of 12.40 yuan) announced that the company plans to raise funds for the 155 million yuan that has not been invested in the "high-performance laser welding professional diamond tool technical transformation project" (hereinafter referred to as the original project). The initial investment for the “Investment in Thailand to establish a wholly-owned subsidiary project†(hereinafter referred to as the new project). The reason for the change was to reduce the impact of US anti-dumping lawsuits against Chinese diamond circular saw blades. This is also the second change in the fundraising project that the company has listed for less than two years. However, the "Daily Economic News" reporter found that in addition to reducing the risk of anti-dumping, the decline in demand for the original project may also be a cause of project changes. Because the original project includes the planned production capacity of major products such as diamond circular saw blades, it has shrunk significantly in new projects; at the same time, the planned production capacity of new products has increased significantly. Boshen Tools, a well-known securities affairs representative, also confirmed to reporters that the market demand for the original project products has declined in the past two years. Revitalization of fundraising projects The Boss Tool announced that the total investment of the new project is 239 million yuan, which is invested in three years, of which 169 million yuan was invested in 2011. After the project is changed, the company will no longer continue to use the raised funds to invest in the original project. It is understood that the company's original project corresponding products are mainly laser welded diamond circular saw blades and engineering thin-walled drill bits, the United States is one of the important markets for such products. However, the US Department of Commerce issued an anti-dumping tax order on November 4, 2009 to impose tariff guarantees on Chinese and Korean diamond circular saw blades and component products. Based on this situation, the Boshen tool changed the original project this year. In fact, this is the second time the company has changed its IPO fundraising project since October 2010. In October 2010, Boshen Tools announced that it had partially changed the “High-performance Laser Welding Professional Diamond Tool Technical Transformation Project†and changed the original investment approved by the project to acquire 100% equity of CYCLONE. 20.4 million yuan of the investment of 253 million yuan. The production capacity of core products has shrunk quietly. After many reporters learned, the change project may be a helpless move to reduce the demand for the original investment products, but this point was not mentioned in the Boshen tool announcement. According to the data provided by the above-mentioned securities of the company, the original project has used funds of 8.671.14 million yuan to form a production capacity of about 200,000 diamond circular saw blades and 200,000 engineering thin-walled drill bits, plus a total of 200,000 pieces of Canadian CYCLONE company ( The total capacity of the branch is about 600,000 pieces. According to the company's announcement, in the new project, the capacity planning of the above products is only 628,300 pieces. Even with the above-mentioned completed capacity of nearly 600,000 pieces, the difference of 1.7 million production capacity planned by the original project is still about 500,000 pieces. According to the company's regular reports, diamond circular saw blades and engineering thin-walled drill bits accounted for 76.65% of the company's main operating income in 2010, which is undoubtedly the core product of the company. It should also be noted that the planned capacity of the cold-pressed sintered saw blade and the hot-pressed sintered saw blade in the new project is 11.418 million pieces, which far exceeds the capacity of the completed laser welding saw blade. For the reasons for the company's product structure adjustment, the company's above-mentioned card representative told the "Daily Economic News" reporter that changes in product structure are related to changes in market demand. Compared with the company's initial planning for fundraising projects, the market demand for laser-welded saw blades has declined in the past two years, while the market demand for low-end sintered saw blades has increased. Zhao Jinming, an analyst at Guojin Securities, also believes that the company expanded its production capacity of laser-welded diamond tools last year, but the demand for low-end sintered saw blades in the domestic and international markets has increased rapidly this year. Based on these analyses, Zhao Ganming slightly lowered the 2011 profit forecast of Boshen Tools.