Puyang Refractories wins 1.25 billion bid to become supplier for Ba Yi Iron and Steel

2022-12-15

Dec. 14, 2022 - Puyang Refractories Company issued an announcement saying that the company has received a notice from Xinjiang Bayi Iron and Steel Co., Ltd, one of the subsidiaries of Baosteel Group. The notice said that Puyang Refractories has won the bidding for the overall contracting project of the steel-making refractories of Bayi Iron and Steel Corporation, with the total contract value being about 1.248 billion yuan to be accomplished in a period of 5 years.

Puyang Refractories is one of the leading companies in China's refractories industry. In 2021, the company realized operating income of 4.378 billion yuan. The successful bid from Bayi Iron and Steel Corporation will have a great impact on the company's operating income in the next five years. What the company produce basically covers the main refractory products such as magnesia carbon bricks, sliding gates, porous plugs, and functional refractories for continuous casting used in steelmaking. 

In the announcement, the company said that after winning the bid, the company will become the exclusive refractories supplier of Bayi Iron and Steel steelmaking project in the next five years, which is conducive to consolidating the company's cooperation prospects with Baosteel Group and Bayi Iron and Steel. The period of the overall contracting project is for a period of five years, and the total amount of the winning bids is 1.248 billion yuan, accounting for 28.51% of the company's audited operating income in 2021, with an average annual amount of 249.6 million yuan, accounting for 5.70% of the company's audited operating income in 2021. If the above projects can be implemented smoothly, it is expected to have a positive impact on the company's operating performance during the period of 2023-2027.

For investors, the company has also issued risk reminders. As of December 14, 2022, the official contract of this bid has not been signed, and the contract content and subsequent execution situations have certain uncertainty.