China Power (600482): Issuing shares and convertible bonds to acquire subsidiary equity to optimize company capital structure

China Power (600482): Issuing shares and convertible bonds to acquire subsidiary equity to optimize company capital structure

In the evening of June 26, the company issued an announcement saying that the company intends to issue ordinary shares and convertible corporate bonds to 8 counterparties, including China Huarong, in order to purchase some of its equity interests in 7 target companies, including Guanghan Power.The price of the ordinary shares subordinated to the issue, and the initial conversion price of the convertible bonds changed by 20.

23 yuan / share, the total transaction consideration is 1,004,633.

880,000 yuan.

In addition, the company plans to issue supplementary funds for the non-public issuance of convertible bonds to no more than 10 investors. The maximum amount of funds is no more than 150 million yuan, which is expected to not exceed 100% of the restructuring transaction price.

Brief comment on the strike. The company has held the 29th meeting of the 6th Board of Directors on January 30, 2019 to pass the reorganization plan and merge with the previous reorganization. The company intends to make the original plan for the transaction as followsAdjustments: 1) The minority stake in Jiangsu Yonghan held by Harbin Guanghan is no longer purchased in this transaction; 2) The minority stake in Hechai Heavy Industries held by CSSC Heavy Industry Group is no longer purchased in this transaction;Reconstruction and reorganization will pass the review before January 31 of the following year, and the target asset gains and losses of the previous year will be shared according to the shareholding ratio.

This adjustment does not constitute a major adjustment to this restructuring transaction plan.

Issuance of shares and convertible bonds acquired part of the equity of 7 subsidiaries. After the completion of the acquisition, 6 of them were wholly-owned subsidiaries of China Power, with Hechai Heavy Industries accounting for 98.


The company intends to separately issue common shares and convertible corporate bonds to China Huarong, Dalian Defense Investment, National Military-civilian Integrative Industry Investment Fund, BOC Investment, China Cinda, Taiping Guofa, China Shipbuilding Industry Corporation, and China National Heavy Industries.Guanghan Power 7.

79% equity, Changhai Power pushed 8.

42% equity in China Chuanchai 47.

82% equity in Wuhan Shipbuilding 44.

94% equity, Hechai Heavy Industry 26.

47% equity, 35 Shaanxi Heavy Industry.

29% equity in Heavy Gear Company 48.

44% equity.

The total consideration of the underlying assets is 1,004,633.

880,000 yuan, of which 940,383.

The consideration of 880,000 yuan was paid by the listed company in the form of ordinary shares, 64,250.

The consideration of RMB 0 million was paid in the form of convertible corporate bonds.

In this transaction, the initial conversion price of convertible bonds is changed by 20 when the common shares are issued.

23 yuan / share, not less than 90% of the average stock trading price 20 trading days before the pricing benchmark date.

Raise matching funds not exceeding 150 million yuan.

The company intends to raise matching funds from non-public issuance of convertible corporate bonds to no more than 10 investors. The total amount of matching funds raised will not exceed 150 million yuan, which is expected to not exceed 100% of the restructuring transaction price.

The initial conversion price of convertible bonds is not lower than 90% of the average trading price of the company’s stocks in the 20 trading days before the pricing benchmark date, and the pricing benchmark date is the first day of the issuance period of the company’s raised supporting funds.

Among the companies intending to acquire specimens in this transaction, the average asset premium of the specimens was reset.

21%, estimated / expected 2018 net profit is 32.

71 times.

Guanghan Power and Changhai Power have higher acquisition premium rates of 166, respectively.

41% and 42.

43%, the remaining target acquisition premiums are below 20%.

Judging from the expected / 2018 net profit, due to China Ship Diesel, Wuhan Ship Machinery’s 2018 net profit penetrated from the decline in 2017, so the PE multiples were higher, which were 116 respectively.

74 times, 527.

39 times.

In addition, the PE ratio of Hechai Heavy Industry is relatively high. The average PE value of Guangchai Power, Changhai Electric Push, Shaanxi Heavy Industry, and Heavy Gear is below 30 times.

The transaction will optimize the 北京桑拿洗浴保健 company’s capital structure and improve the company’s operating quality.

The company intends to supplement shareholders’ supplementary capital through this transaction, thereby optimizing the capital structure of listed companies, reducing leverage, reducing the financial burden of the company’s subsidiaries, improving the quality of operations, and promoting the completion of quality and efficiency improvements for listed companies to achieve operating performance and profit levels.improve.

Dating specific investors will promote listed companies to deepen the reform of state-owned enterprises, stimulate the company’s endogenous growth vitality, strengthen the company’s comprehensive strength, and lay a solid foundation for the company’s long-term sustainable and healthy development.In addition, it also fulfilled its previous restructuring commitments and gradually eliminated peer competition.

The gas turbine technology broke through the monopoly, and domestic substitution promoted the market to enter a period of rapid growth. Guanghan Power undertook 703 core gas steam power business, which has obvious technical advantages and barriers.

Guanghan Power’s gas turbines have achieved technological breakthroughs and industrialization in both military and civilian products.

In terms of military products, Guanghan Power is the main supplier of gas power units and steam power units for large and medium sized naval vessels.

In terms of civilian products, Air Force Guanghan Power has broken through the foreign technology monopoly in the field of gas turbine-driven compressor units, achieved domestic production of 30MW gas turbines, and has obtained bulk orders for natural gas transportation projects.

Recently, the company’s gas turbine products have been implemented on offshore engineering platforms, which will further open up the space for the civilian product market and gradually transform into a new market for offshore engineering platforms, which will gradually increase market demand.

At the same time, the company plans to make integrated investments in the upstream and downstream industrial chain of gas turbines, and plans to make capital contributions1.

US $ 900 million in equity investment in Jiangsu Yonghan Special Alloy Technology Co., Ltd., Jiangsu Yonghan’s main product direction is precision casting of high temperature end parts required for gas turbines, which is the upstream industry of gas turbines and is expected to have synergy with the company’s gas turbine business.
We believe that the gas turbines produced by Guanghan Power, a subsidiary of China Power, are sufficiently competitive with foreign countries in terms of price and maintenance, and there are already prototypes in use, which will replace imported equipment and accelerate the localization process.

The performance of China Power Gas Turbine segment will enter a period of rapid growth.

All-electric power is in line with the development of the industry. Comprehensive electric propulsion facilities with a broad market space in the future are featured by flexible layout and fuel saving. It is suitable as a propulsion system for military ships. In the future, the ship’s propulsion system will advance to integrated power.

At the same time, domestic military and civilian ships have continued to increase their requirements for informatization and intelligence, which will generate huge market demand for integrated electric propulsion systems.

Shanghai Submarine, a subsidiary of the company, is a leader in the field of domestic electric propulsion systems. It has transitioned to the technical advantages of the core components of the propulsion system of the 712 subordinate of China Shipbuilding Industry Corporation, realizing ship electrical system products with single-axis propulsion power below 20MWAll localized.

On the basis of technological advantages, the company’s market share advantage is obvious, the military product sector has an absolute monopoly level, the market share has reached more than 90%, and the civilian product sector has also reached more than 70%.

We believe that all-electric power is the main development direction of future ship power. At present, it has taken the lead in implementing applications in 3,000-ton civil ships such as sea cruise ships, marine police ships, business ships, and scientific research ships. The continuous maturity of technology will gradually expand.To large and medium ships.

At the same time, with the continuous improvement of economy, there will be room for growth in civilian products. In the future, the company’s all-electric power sector is expected to reach an annual growth rate of more than 20%.

Benefiting from the construction of offshore floating nuclear power plants, the performance of nuclear power may accelerate. In the future, the market space for offshore nuclear power platforms will be about 40, and the market size will reach $ 100 billion.

Neptune, a subsidiary of China Power, was a leading manufacturer of civil nuclear power equipment business earlier. It has civil nuclear safety design licenses and manufacturing qualifications for nuclear-grade valves. EU CE, US API600 and API6D and other qualified companies have participated in the first ocean of China Shipbuilding Industry.The construction of nuclear power platform is mainly responsible for design, pipelines, valves, testing equipment, protective equipment and maintenance. The company assumes that the system accounts for about 15% of the cost of offshore nuclear power platforms.

We believe that with the resource advantages of the parent company of CSSC, Neptune will replace the market leader or even the occupier in the offshore nuclear power platform power equipment.

After the offshore nuclear power platform achieves mass production, it will significantly stimulate the company’s offshore nuclear power business development.

Full coverage of diesel engine types. After integration, the market influence greatly increased and surpassed the recovery of the new shipbuilding market. The company’s diesel engine business promoted accelerated growth.

The new shipbuilding market has experienced a recession period of nearly 10 years, starting to bottom out in 2017, and new orders have begun to accelerate growth, effectively driving the company’s diesel engine power orders growth.

Although the prices of these orders are still low, the profit margin of the final assembly manufacturers is still not in any contradiction of profitability and difficulty. Instead, the final orders favor the internal supporting enterprises. In fact, the decline in the order price will promote the final assembly plant to choose more domestic supporting facilities.Manufacturer’s equipment.

Therefore, the progress of domestically produced alternatives to conversion power systems has accelerated, and these orders will effectively drive the company’s diesel engine orders to accelerate growth this year and next.

In terms of capacity building, the company intends to invest in China’s Chuanchai to optimize and adjust the layout and process of the Qingdao plant to meet the demand for the 1 million horsepower marine low-speed diesel engine assembly capacity in the Yichang plant to move to the Qingdao plant, and to form a dual-fuel low-speed diesel engine.And final assembly capacity; transform and upgrade the production line in the Dalian plant, and improve the efficiency and quality of final assembly of marine low-speed diesel engines.

At the same time, the establishment of the Southwest Research Institute will further strengthen the company’s R & D and production capacity of core components for diesel engines, and increase the core competitiveness and industrial added value of the diesel engine business.

Earnings forecast and investment grade: The value-added indicates shareholders’ confidence in the company’s development. Maintaining the level of increase in holdings. We believe that the company is a leader in internally covered marine land power systems. It is expected to be in the all-electric propulsion system, gas steam power andOffshore nuclear power and other business segments achieved rapid growth.

Traditionally advantageous businesses such as diesel power and chemical power will integrate platform integration advantages and maintain steady expansion.

The operating revenue is expected to show a steady growth trend. The integration of various business segments has been completed, the scale and synergy effects have gradually emerged, and the company’s product gross margin may have steadily increased.

It is expected that the company’s net profit attributable to its parent from 2019 to 2021 will be 16 respectively.

2.1 billion, 18.

9.1 billion, 22.

35 ppm, an increase of 20 per year.

23%, 16.

67%, 18.

21%, the corresponding 19 to 21 years of EPS are 0.

94, 1.

10, 1.

30 yuan, corresponding to the current expected PE is 25.

82 times, 22.13 times, 18.

72 times.

If the completion of the transaction is considered, the net profit attributable to the mother for 2019-2021 will be 19 respectively.

05 billion, 23.

04 billion, 27.

80 ppm, an increase of 22 per year.

07%, 20.

97%, 20.

68%, the corresponding 19 to 21 years EPS are 0.

87, 1.

06, 1.

27 yuan, corresponding to the current expected PE of 27.

92 times, 23.

08 times, 19.

13 times.