Sinochem Equipment progresses purchase of rubber machinery makers

Qingdao, China — The Shanghai Stock Exchange's (SSE) mergers and acquisitions committee has approved Sinochem Equipment Technology (Qingdao) Co. Ltd's proposed acquisition of Yiyang Rubber & Plastics Machinery Group Co. Ltd and Bluestar (Beijing) Chemical Machinery Co. Ltd. 

In a notice issued 20 July, the committee concluded that the proposed share transaction "meets the conditions for restructuring and information disclosure requirements."

The committee, however, questioned differences in the performance of Sinochem Equipment's rubber machinery business compared with Guilin Rubber Machinery and Yiyang Rubber Machinery during the reporting period.

The listed company was asked to explain the reasons for the performance differences, taking into account "entrusted management arrangements, business positioning, product and customer structure."

It was also asked to clarify the impact of the transaction on the company's "ability to continue as a going concern."

The committee also sought clarification over Yiyang Rubber Machinery's revenue recognition policy.

Specifically, it asked whether recognising revenue "upon customer acceptance" complies with accounting standards, given the customised nature of the company's products, the terms of its sales contracts and industry practice.

The SSE said there were "no further matters requiring implementation."

The latest approval marks another step in Sinochem Equipment's planned asset restructuring, which was first announced in July 2025.(ERJ report)

The transaction involves the issue of shares to acquire 100% of Yiyang Rubber Machinery from China National Chemical Equipment Co. Ltd and 100% of Bluestar (Beijing) Chemical Machinery Co. Ltd from Beijing Bluestar Energy-Saving Investment Management Co. Ltd.

Earlier this year, the restructuring won approval from China's State-owned Assets Supervision and Administration Commission (SASAC).

The transaction also includes a plan to raise supporting funds through a share issue to up to 35 qualified investors.

Sinochem Equipment has previously said the acquisition will strengthen its industrial business while not constituting a change in the company's controlling shareholder.