Corporate Restructurings In Jinguo Industry Co.,Ltd

Founded in August, 2003, Gold Fruit Co., Ltd. began its IPO of 2500 shares in Shenzhen Stock Market at the price of 5.09 yuan per share on April 29, 1997, and then it was listed there in May, 1997. The company is mainly engaged in the industries like electric power, natural gas, hotel, food, logistics and real estate, but now, in front of the problems of unclear dominant businesses, lack in cash flow and poor profitability, assets restructuring should be an important and effective resolution.The large shareholder of Gold Fruit, Hunan Xiangtou Holding Group Co., Ltd. (XTGC), plans to replace some of the entities of Hunan Electronic and Information Industry Group Co., Ltd.(HEC), one of its holding companies, with the assets of Gold Fruit Industry. However, how will the assets be better deployed so as to improve the company's profitability and solve the cash flow problem? This thesis firstly discusses every entity in question and makes a forecast of profit about them on the basis of market analysis. Then the author makes a comparison among those entities from the aspect of finance, growth opportunities and risks, and thus proposes a program of assets replacement for the resolution of the above-said problems, in consideration of the current situation of XTGC and Gold Fruit.Finally the thesis gives an evaluation of the value of Gold Fruit after the exchange by the methods of discounted cash flow and PE, and concludes that the after-exchange price is about 15 yuan per share, which is about 12 yuan higher than the price before the exchange (3.2 yuan). As a result, it proves that the replacement helps rise the value of the company.Nowadays, there is a common problem in China's stock market, that is, the whole market is full of a batch of listed companies without good quality. This thesis discusses the program of assets replacement, which is supposed to set an example for those companies for their replacement of assets.