Recently, Legend Capital and Shanxi Yuci Guolian Steel Pipe Co., Ltd have signed a term sheet. The former invests approximately RMB150 million to hold 25% stakes in the latter. The PE value of buying stakes ranges about 10-12 times. At present, this project has entered the Due Diligence stage.

Shanxi Yuci Guolian Steel Pipe Co., Ltd is a private joint-stock enterprise. Its current business includes State-owned petroleum and gas transportation projects.

It is estimated by industry experts that the market size of pipe making industry has currently expanded unceasingly. Although production and demand keep balanced as a whole, there is 1 million-ton shortage of high-end pipelines, which can be applied in petroleum and gas transportation. According to someone familiar with the company,  Shanxi Yuci Guolian Steel Pipe Co., Ltd is the biggest welded pipe manufacturer in Shanxi Province and has become an industry leader of pipe making industry in North China. It commands over 98% market shares in Shanxi.

Shanxi Yuci Guolian Steel Pipe Co., Ltd will continue to expand its overseas business. In the future, it will receive follow-on financings.