Chinese-listed listed company China Power Construction made a big move. On the evening of January 6, the company announced that it plans to replace its assets worth 24.718 billion yuan in real estate sector with the 24.653 billion yuan in high-quality power grid auxiliary industries held by its controlling shareholder Power Construction Group. At the same time, Nanguo Real Estate also announced the change of property rights of the controlling shareholder.
On January 6, the market funds seemed to have a keen sense of smell. They first gave China Power Construction a daily limit, blocking orders of 178,000 lots, and closed at 8.36 yuan as of the closing, with the latest total market value of 127.9 billion yuan. In fact, China Power Construction's increase in 2021 reached 113%.
Fund Jun interviewed several public and private equity fund managers to see what impact this big move of China Power Construction has.
htmlOn the evening of January 6, China Power Construction issued an announcement stating that in order to properly resolve the inter-professional competition between the Power Construction Group and the company, the company plans to replace its assets with its controlling shareholder Power Construction Group, and replace its assets in the real estate sector (referred to as asset purchase) with the high-quality power grid auxiliary industry-related assets held by Power Construction Group (referred to as asset purchase) held by Power Construction Group. announcement also stated that this transaction is intended to be conducted by a non-public agreement transfer method. The total valuation value of the owner's equity (deducted perpetual bonds) of the asset as of August 31, 2021 was RMB 24.719 billion, and the total valuation value of the owner's equity (deducted perpetual bonds) of the asset as of August 31, 2021 was RMB 24.653 billion. The difference between the assets sold out and the assets stored in is RMB 65.3426 million, which will be paid to the company by Power Construction Group in cash.
It is understood that the assets are equity shares of 18 companies held by China Power Construction Group Huazhong Electric Power Design Research Institute Co., Ltd., China Power Construction Group Hebei Electric Power Survey and Design Research Institute Co., Ltd., Sichuan Electric Power Design Consulting Co., Ltd., and Shanghai Electric Power Design Institute Co., Ltd.
has 100% of the equity of three companies, including Power Construction Real Estate, Beijing Feiyue Airport Technology Industry Development Co., Ltd. and Tianjin Haifu Real Estate Development Co., Ltd., held by China Power Construction.
In addition, among the assets replaced in this asset, the appraised appreciation rate of the target company Shanghai Electric Power Design Institute Co., Ltd. is 193.21%. Power Construction Group made a performance commitment, and the cumulative net profit of Shanghai Institute in 2022-2024 is not less than RMB 455.9524 million.
From the perspective of equity relations, Power Construction Group directly holds 8.926 billion shares of China Power Construction, accounting for 58.34% of the company's total share capital, and is the company's controlling shareholder.
Regarding the impact of this transaction, China Power Construction stated that this asset replacement will help reduce competition among the company and its controlling shareholder. Through this asset replacement, the controlling shareholder will inject high-quality assets with the company in the same industry competition with the company, which will help reduce the competition between the company and the controlling shareholder and enhance the company's independence.
At the same time, this asset replacement is conducive to optimizing the company's assets and increasing the company's revenue. Through this asset replacement, the company has invested 18 high-quality power grid auxiliary assets under the Power Construction Group, which is conducive to further optimizing the company's assets and improving the company's industrial structure. The overall profitability of the assets placed in this transaction is higher than that of the assets placed, which is conducive to enhancing the company's return on assets and earnings per share, and improving the company's profitability and asset quality.
Nanguo Real Estate also announced the change of property rights of the controlling shareholder
At the same time, on the evening of January 6, Nanguo Real Estate also disclosed an announcement on the change of property rights of the company's controlling shareholder.
announcement shows that Nanguo Real Estate recently received a notice from its controlling shareholder China Power Construction Real Estate Group Co., Ltd. that in order to fulfill the relevant commitments of China Power Construction Co., Ltd. and its controlling shareholder China Power Construction Group Co., Ltd., China Power Construction plans to replace its real estate assets with the high-quality grid auxiliary industries held by the Power Construction Group, and the difference will be made up in cash. If this transaction is completed, the controlling shareholder and actual controller of Nanguo Real Estate will not change, and the equity level will change.
Before this transaction, Power Construction Real Estate directly held 22.43% of Nanguo Real Estate's shares, and indirectly held 18.06% of Nanguo Real Estate's shares through its wholly-owned subsidiary Wuhan Xintiandi Investment Co., Ltd., Power Construction Real Estate holds a total of 40.49% of Nanguo Real Estate's shares, and is the controlling shareholder of Nanguo Real Estate; China Power Construction Holds 100% of the shares of Power Construction Real Estate and is the indirect controlling shareholder of Nanguo Real Estate; Power Construction Group is the controlling shareholder of China Power Construction and the actual controller of Nanguo Real Estate.
After the implementation of this transaction, Power Construction Group will directly hold 100% of the equity of Power Construction Real Estate. Power Construction Real Estate will still directly hold 22.43% of the shares of Nanguo Real Estate, and indirectly hold 18.06% of the shares of Nanguo Real Estate through its wholly-owned subsidiary Wuhan Xintiandi Investment Co., Ltd., and Power Construction Real Estate will hold a total of 40.49% of the equity of Nanguo Real Estate.
Nanguo Real Estate stated that the implementation of this transaction will not lead to changes in the company's direct controlling shareholder and actual controller. The company's direct controlling shareholder is still Power Construction Real Estate, and the actual controller is still Power Construction Group. The company's controlling shareholder and actual controller will continue to actively support the subsequent development of Nanguo Real Estate through its own resources and capabilities. This transaction will not have an adverse impact on the company's production, operation and business development, and will not harm the interests of the company, shareholders, especially small and medium shareholders.
Public and private equity fund managers believe that it is conducive to long-term development
In fact, this matter has been around for a long time and the market has been paying attention. Regarding the impact of asset replacement, Fund Jun interviewed several public and private equity fund managers on this. They said that this matter had been announced by China Power Construction before, which was in line with market expectations and was a good thing for listed companies, with a more prominent main business, which was conducive to their long-term development.
A private equity investment manager in Shanghai said that China Power Construction divested its relatively low-value real estate business and replaced the high-quality power grid auxiliary industry-related assets of the Power Construction Group, which is beneficial to the listed company. "And Power Construction is also seeking transformation now. It used to do global power station construction and transform into a platform with power station operations as the main body. I think the development prospects are relatively good in the long run." A public fund manager of
said, "This matter has been previewed before. It is the group that solves the problem of competition among peers. It is a good thing for listed companies, and its main business is more prominent."
and fund managers said that this is in line with the direction of policy guidance, controlling real estate investment, and increasing investment in the transformation of energy structure. "However, when investing, investors still need to pay attention to fundamentals and stock prices, make rational judgments, and never be blinded by short-term positives."
From the perspective of performance, in the first three quarters of 2021, China Power Construction achieved operating income of 315.4 billion yuan, a year-on-year increase of 22.3%; net profit was 6.36 billion yuan, a year-on-year increase of 8.4%.
CICC believes that from the perspective of engineering business, China Power Construction has sufficient orders in hand, and the investment in wind, photoelectric and storage injections are expected to drive the continued high growth in engineering revenue. From the perspective of investment business, China Power Construction has ushered in a double improvement in profit growth and valuation. "We believe that the increase in the proportion of profits in the future of investment business is expected to help improve the company's operating cash flow performance and alleviate debt pressure. The potential catalyst is the acceleration of the implementation of wind and solar and hydropower investment. As the construction of wind and solar and pumped storage is expected to accelerate, we have raised the company's 2021/2022 net profit forecast attributable to shareholders of 19%/42% to 8.35/9.82 billion yuan."
China Power Construction's stock price rose by 113% in 2021
As a Chinese listed company, China Power Construction listed on the Shanghai Stock Exchange in October 2011, and its stock code is 601669. China Power Construction is a global comprehensive super-large construction group that provides integrated and integrated solutions in the entire industry chain in the fields of energy, electricity, water resources and environment, infrastructure and real estate. China Power Construction has a complete core technical system for surveying, designing, construction and operation of hydropower, thermal power, wind power and photovoltaic power generation projects.
Judging from the stock price performance, China Power Construction's stock price began to start in the second half of 2021, rising from around 3 or 4 yuan to a stage high of 9.96 yuan in September 2021, and the amplitude was also relatively large. China Power Construction's overall increase in 2021 reached 113.11%.
On January 6, 2022, China Electric Power Construction hit a daily limit, reaching 8.36 yuan as of the closing, with a total market value of 127.9 billion yuan.
This article is from China Fund News
