Panzhihua Steel Vanadium Titanium "Olong good" was proved to be a huge deficit

“The Panzhihua Iron and Steel Plate is relatively large, and the stock price is stable. Together with the overall sluggishness of the steel industry, we rarely pay attention to it,” said a capital market person in Sichuan.

However, the recent Panzhihua Vanadium and Titanium (000629.SZ) began a soaring trip, the stock price rose from 2.99/share on December 15 to 4.64 yuan/share on the 22nd, an increase of up to 55.18%. According to the 21st Century Business Herald reporter, this surge is mainly due to an article issued by the Panzhihua Iron and Steel Group’s official micro-signal on December 15. “The tens of millions of vanadium battery products developed by Panzhihua Iron & Steel Group and Pu Neng Group and Wan Litong Company have been Mass production."

However, the above-mentioned significant benefits have been "falsified". On the evening of December 20, Panzhihua Vanadium and Titanium announced that “Pangang Group did not manufacture vanadium batteries and did not directly participate in research and development of vanadium batteries of the PuEnergy Group, nor did it have a cooperative relationship with the Wanliton Company.”

However, under the stimulation of the above “Oolong News”, Panzhihua Steel Vanadium and Titanium actually obtained the strong pursuit of institutions and hot money, and has continuously pulled out 4 daily limit. The 21st Century Business Herald reporter called the operations personnel of the Panzhihua Iron and Steel Group WeChat public number and the listed company Panzhihua Vanadium Titanium related persons, but both parties did not comment on the matter.

"Oolong good" was falsified

On December 15, Panzhihua Iron and Steel Group’s official public number issued an article titled “Vanadium Battery Development Helps Panzhihua Realize Vanadium and Titanium Dreams”. The article mentions that "in the near future, Panzhihua Iron and Steel and Pu Neng Group (mergers with the world's largest vanadium battery company - Canadian VRB company), Wan Litong company developed a kilowatt-class vanadium battery products have been mass produced, there is a Megawatt vanadium battery products are in commercialization demonstration stage."

The above sources came from an article published on WeChat on Panzhihua Vanadium and Titanium Trading Center on June 30, 2015. According to public information, Panzhihua Vanadium and Titanium Trading Center was initiated and established by the Commodity Exchange under the leadership and support of the Panzhihua Municipal Party Committee and the municipal government. Panzhihua Iron and Steel Group, Kunming Iron and Steel, Panzhihua Fengyuan Mining and Panzhihua Titanium Chemical Co. Made of vanadium and titanium products professional trading platform.

Since December 17, Panzhihua Vanadium and Titanium has reached a daily limit of 4 trading days. On the evening of December 20, Panzhihua Vanadium and Titanium announced that “After being questioned by Panzhihua Iron and Steel Group, Panzhihua Iron and Steel Group’s official WeChat staff negligence had quoted and reproduced the vanadium published by other online media without careful verification. The battery-related information is different from the actual situation of Pangang Group. "The company also stated that" Panzhihua Iron and Steel Group has not produced vanadium batteries, but has been devoted to solid ** vanadium and vanadium electrolytes required for vanadium batteries. Development and industrialization."

Although Panzhihua’s vanadium and titanium clarified the “volume production of vanadium batteries”, the institutions and hot money were madly pursued. On December 21, Panzhihua’s vanadium and titanium hit another daily limit. According to the statistics of the Dragon and Tiger List, the three institutions' seats on the same day collectively bought Panzhihua Steel's vanadium and titanium 287 million yuan.

The above sources pointed out that “at present, the overall steel stocks are at a low level, and some companies’ share prices have fallen below their net assets, which has provided space for the rebound of steel stocks. Although Panzhihua Vanadium and Titanium clarified the rumors of vanadium batteries, the company is the largest in the country. The vanadium and titanium production companies will also increase the speculation of capital."

"Hot potato" hard to shake

In stark contrast to the secondary market share price, Panzhihua’s vanadium and titanium performance did not improve, and the Australian iron ore project is still difficult to change hands.

Following the huge loss of 3.775 billion yuan in 2014, Panzhihua’s vanadium and titanium operations are also not optimistic this year. The company's three quarterly report showed that from January to September this year, operating income of 8.815 billion yuan, a year-on-year decrease of 30.49%; attributable to the parent company net profit loss of 972 million yuan, a year-on-year decrease of 1211.17%.

From the point of view of the main composition of the company, ore and iron ore concentrate account for the largest proportion of revenue, followed by vanadium and titanium products. Iron ore continues to slump this year, with a drop of nearly 50% during the year, undoubtedly causing a drag on the company's performance.

Panzhihua Vanadium and Titanium also tried to get rid of the burden and transferred the Australian iron ore project to Angang, a related company, but the results were not satisfactory.

In June this year, Panzhihua Vanadium and Titanium announced that it intends to transfer 100% equity of Angang Group Hong Kong Holdings Co., Ltd. and Angang Group Investment (Australia) Co., Ltd. to 100% equity of Angang Group Investment (Australia) Co., Ltd. to Angang, the two companies mentioned above. The main asset is the Australian Carrara Mining Company. Panzhihua Vanadium and Titanium's 2014 annual report shows that Carragher's loss in 2014 was as high as RMB 4.565 billion. Coupled with the asset impairment caused by the sharp fall in iron ore, Panzhihua’s vanadium and titanium suffered a huge loss last year.

Faced with Carrara's "hot potato", Angang Mining is reluctant to take over. Panzhihua Vanadium and Titanium announced on October 22 that due to difficulties in reaching agreement between the parties on the valuation and pricing of the assets to be sold, the company decided to terminate the plan for the disposal of the assets.

The aforementioned person pointed out that “after the failure of the transfer of Carrara’s equity, Panzhihua’s vanadium and titanium has been more difficult to turn losses this year, while the fall in iron ore is due to systemic risks and it is difficult to improve in a short time.”