Focusing on new energy power generation in one hand and lithium battery energy storage in the other, Chuanneng Power (000155) continues to add to the existing business map.
On the evening of May 29, Chuanneng Power released a transaction plan for the acquisition of its holding subsidiary Sichuan Energy Investment Wind Power Development Co., Ltd. (hereinafter referred to as “Chuanneng Wind Power”) and its subsidiaries: it intends to purchase its holdings from Dongfang Electric. 20% equity of Chuanneng Wind Power, purchased from Chengdu Mingyong Investment Co., Ltd. (hereinafter referred to as “Mingyong Investment”) 10% equity of Chuanneng Wind Power and 5% equity of Chuanneng Wind Power’s subsidiary Huidong Energy, 49% equity of Meigu Energy, Yanbian Energy 5% equity and 49% equity of Leibo Energy; at the same time, it will issue shares to no more than 35 specific investors to raise supporting funds, which will be used for the “Phase I Wind Power Project of Xiaojie, Huidong County, Liangshan Prefecture” and “Tangtang, Huidong County, Liangshan Prefecture”. Phase II Wind Power Project” and supplementary working capital. At present, the audit and evaluation work has not been completed, the transaction price has not yet been determined, and the company’s shares will resume trading tomorrow.
On the same day, the company announced an investment of 400 million yuan in the 1.05 million tons/year mining and dressing project of Lijiagou spodumene mine in Jinchuan County, which will increase the investment from the original 1.25 billion yuan to 1.65 billion yuan.
Acquisition of minority stake in overweight wind power business
As the main carrier of Chuanneng Power’s wind and photovoltaic power generation business, Chuanneng Wind Power’s current equity structure is that Chuanneng Power holds 70%, Dongfang Electric holds 20%, and Mingyong Investment holds 10%; other underlying assets will be held by Dongfang Energy, Meigu Energy, Yanbian Energy and Leibo Energy are all controlled by Chuanneng Wind Power, and Mingyong Investment is a shareholder. After completing the acquisition of minority shareholders’ equity, Chuaneng Power will realize the wholly-owned holding of the aforementioned company.
From the perspective of transaction methods, the acquisition of 20% equity of Chuanneng Wind Power held by Dongfang Electric will be carried out by issuing shares and convertible bonds at the same time; the acquisition of equity held by Mingyong Investment will only be carried out by issuing shares. In order to support the development of the underlying asset business, this transaction will also support the raised funds for wind power projects under construction and to supplement working capital. Since the evaluation and audit work has not yet been completed, the current transaction price has not been released. The issue price of the purchased asset shares has been determined at 14.84 yuan per share, which is a 17.5% discount to the closing price of 17.99 yuan per share before the suspension.
Since being included in the consolidated statement of listed companies in 2017, Chuanneng Wind Power has always had strong profitability. In 2020 and 2021, it recorded operating income of 826 million yuan and 1.14 billion yuan, and net profit of 406 million yuan and 507 million yuan. In the first quarter of this year, it has achieved revenue and net profit of 504 million yuan and 330 million yuan. Among the subsidiaries of Chuanneng Wind Power, except for Leibo Energy, which is in a state of loss because no projects have been put into operation, the other three companies are relatively profitable. Among them, Huidong Energy will have a net profit of 343 million yuan in 2021. As of the end of 2021, the installed capacity of Chuanneng wind power is 944,200 kilowatts, and the power generation in 2021 will be 2.387 billion kilowatt hours, a year-on-year increase of 22.75% and 37.9%; in terms of backup resources, currently Huidong Energy Street Phase I Wind Farm and Tangtang II The wind farm in the current period has obtained approval and the cumulative installed capacity is 280,000 kilowatts. The supporting funds raised this time are mainly used for the construction of the aforementioned projects.
Realizing 100% control of the profitable subsidiary, the profitability of Chuaneng Power is expected to increase significantly. According to the company, according to simulation calculations, if a minority stake is acquired, the listed company’s net profit attributable to the parent in 2021 will increase from 340 million yuan to 548 million yuan, an increase of 61.16%.
The lithium battery sector is gaining momentum
In addition to the wind power business, Chuanneng Power has also continuously increased its investment in the lithium battery sector. This evening, the company stated that the investment amount for the 1.05 million tons/year mining option of the Lijiagou spodumene mine was raised from 1.25 billion yuan to 1.65 billion yuan. The reason for choosing additional investment is mainly due to the optimization and adjustment of the original plant selection site and the increase in related infrastructure investment and public and auxiliary projects. As of the end of April, the project has completed a total investment of 628 million yuan.
In recent years, Chuanneng Power has established a two-wheel drive business development strategy of “new energy power generation + lithium battery energy storage”. Among them, new energy power generation has strong profitability and is the basic business plan; lithium battery energy storage, as a new profit growth point, focuses on The lithium ore business and lithium salt business are still in the early stage of construction, and their contribution to the company’s revenue is relatively small. They are in the transformation stage from a cultivation business to a core business and a profit-contributing business of the company, which requires the support of the new energy power generation business. .
In 2021, Chuanneng Power will complete the acquisition of 62.75% equity of Sichuan Energy Investment Lithium Industry Co., Ltd. (hereinafter referred to as “Energy Investment Lithium Industry”) for 927 million yuan. The latter’s Sichuan Dexin Mining Resources Co., Ltd. The mining rights of Lijiagou spodumene mine have officially entered the field of lithium mining; in May this year, it is planned to transfer a 5% stake in Energy Investment Lithium Industry to Sichuan Luqiao at a price of 150 million yuan. Comprehensive strategic cooperation; in terms of lithium salt business, the company holds 25.5% of Dingsheng Lithium and is entrusted to manage 25.5% of the equity. Currently, it is promoting the acquisition of 46.5% of Dingsheng Lithium and 43.74% of Sichuan Guoli. According to the data, Dingsheng Lithium Industry completed and put into operation a lithium salt production line with an annual output of 10,000 tons at the end of 2018. In April this year, the 5,000-ton lithium carbonate technical renovation and expansion project was successfully started at one time. At present, Dingsheng Lithium has signed an investment agreement for a 30,000-ton basic lithium salt project with De’A Industrial Park, with a total investment of 1.5 billion yuan.
The Huaxi Securities Research Report pointed out that under the high prosperity of the lithium resource industry, the Lijiagou mine controlled by the company will be put into operation in 2022. Maximize the retained profits of the lithium business segment.Return to Sohu, see more
Disclaimer: The opinions of this article only represent the author himself, Sohu is an information publishing platform, and Sohu only provides information storage space services.