房地产：国资收购民营建筑施工上市公司发展研究

Industry Overview - The construction industry is facing increasing downward pressure and intensified competition, with market share continuing to concentrate in large central enterprises (CEs) [4] - In 2023, the new contract value of the seven major construction CEs accounted for 41.89% of the national construction industry's new contract value, an increase of 3.76 percentage points year-on-year [5] - Private construction companies are experiencing difficulties due to over-reliance on PPP projects, limited financing capabilities, and short-term debt for long-term investments, creating opportunities for state-owned capital (SOC) acquisitions [5] Acquisition Motivations - SOC acquisitions of private construction companies are driven by multiple factors, including obtaining scarce resources, local government financing platform (LGFP) transformation needs, resource integration, business synergy, corporate bailouts, local economic stability, and investment attraction [9] - Acquiring listed companies is attractive due to their scarcity and the lengthy, uncertain IPO process in China [9] - LGFPs are seeking market-oriented transformations, and construction companies are a viable option due to their relatively low market entry barriers and large revenue scale [9] - Business synergy and resource integration are key motivations, as some SOCs are local infrastructure construction entities with complementary businesses [9] - Acquisitions can also serve as a means to stabilize local economies, protect tax revenues, and attract investments by relocating the acquired company's registration and operations [10] Acquisition Methods - Common acquisition methods include negotiated equity transfers, private placements, secondary market purchases, tender offers, and voting rights entrustment [11] - Negotiated equity transfers are the most commonly used method, allowing for quick acquisition of large shareholdings but may not immediately improve the target company's capital strength [12] - Private placements are often used to consolidate control and inject liquidity, but they require regulatory approval and carry uncertainty [13] - Secondary market purchases or tender offers do not require complex approval processes but may involve higher acquisition premiums [13] - Voting rights entrustment can quickly transfer control with minimal capital but carries risks of losing control if the entrusted shares are subject to legal disputes [13] Positive Impacts of SOC Acquisitions - SOC acquisitions can provide financial support and enhance the financing capabilities of acquired companies through direct capital injections, guarantees, and improved credit access [15] - Acquired companies can benefit from the resources and reputation of SOCs, gaining competitive advantages in bidding and access to local government resources [15] - SOCs often introduce more standardized management systems, improving the long-term stability and development of acquired companies [16] - Acquisitions can facilitate the market-oriented transformation of LGFPs by leveraging the technical expertise and market resources of construction companies [16] Challenges and Risks of SOC Acquisitions - SOCs may underestimate the capital needs of construction companies, especially given the industry's long payment cycles and the risks associated with PPP projects [17] - The expected benefits of SOC support, such as improved financing and business resources, may fall short of expectations due to macroeconomic and policy changes [18] - SOCs face pressure to preserve and increase state-owned assets, and the mismatch between investment and returns may lead to hesitation in further support [19] - The cyclical nature of the construction industry poses long-term challenges, and SOC support may not be sufficient to counteract industry downturns [19] - Risks of losing control and increased financial burdens on the acquirer are significant concerns, especially for LGFPs with existing liquidity pressures [21] Post-Acquisition Performance Analysis - Based on a sample of 9 private construction companies acquired by SOCs between 2018 and 2023, the overall performance improvement is limited, with diminishing effects over time [36] - Companies with higher SOC ownership and stronger financial and business support showed relatively better performance improvements [36] - Companies with lower SOC ownership, poor business coordination, and large PPP project exposures performed poorly [36] - Among the 9 companies, only 2 showed improved rankings post-acquisition, while 6 experienced declining rankings [42] - The best performance improvements were observed in the second year post-acquisition, but the effects weakened over time [43] Key Recommendations - SOCs should assess potential business synergies with target companies and avoid acquisitions solely for the purpose of controlling listed companies [47] - The cyclical nature of the construction industry should be carefully considered, and SOCs should be prepared for prolonged periods of underperformance in acquired companies [47] - Thorough due diligence is essential to understand the target company's risk exposures and ensure that the SOC's support capabilities align with the company's needs [49] - Acquisition methods and ownership structures should be carefully designed to avoid control risks and ensure sustainable support [49] - SOCs should be cautious of acquiring companies with high delisting risks, given the increasing regulatory focus on delisting underperforming listed companies [50]