On February 8, Changhong energy (836239, BJ; yesterday’s closing price of 96.80 yuan), a listed company on the Beijing stock exchange, disclosed the plan for issuing shares and paying cash to buy assets and raising supporting funds and related party transactions. The company plans to issue shares and pay cash to buy 33.17% equity of Changhong Sanjie new energy Co., Ltd. (hereinafter referred to as Changhong Sanjie), the holding subsidiary of the company. After the completion of this transaction, Changhong Sanjie will become a wholly-owned subsidiary of the listed company.
Changhong energy started with alkaline zinc manganese battery and officially entered the lithium battery industry by acquiring the equity of Changhong Sanjie in 2017, forming a dual product system layout of “alkali battery + lithium battery”.
Changhong Energy said that through this transaction, the company will further aggregate high-quality lithium battery assets and thicken its performance.
From 2018 to 2020, Changhong energy achieved steady growth in performance. The company’s revenue was 1.071 billion yuan, 1.417 billion yuan and 1.952 billion yuan respectively, and the net profit attributable to the parent company was 62 million yuan, 105 million yuan and 162 million yuan respectively.
the pricing of this transaction has not been determined
On February 8, Changhong energy disclosed the plan for issuing shares and paying cash to purchase assets and raising supporting funds and related party transactions. The company plans to pay the minority shareholders of Changhong Sanjie, Yang Qingxin Zhao Xuedong and Taixing Zhongjie new energy partnership (limited partnership) issued shares and paid cash to purchase 33.17% equity of Changhong Sanjie. After the completion of this transaction, Changhong Sanjie will become a wholly-owned subsidiary of the listed company.
At the same time, Changhong energy plans to issue shares to qualified specific investors such as Changhong Group, the controlling shareholder of the company, and Changhong energy’s employee stock ownership plan to raise supporting funds. The total amount of supporting funds raised this time shall not exceed 100% of the transaction price of shares to be issued and cash to buy assets, and the number of shares issued shall not exceed 30% of the total share capital of the company before this issuance. The company said that the raised amount, after deducting intermediary expenses and other relevant expenses, is intended to be used to supplement the working capital of the listed company and the target company and the project construction of the target company.
The reporter of “daily economic news” found that at present, the asset audit and evaluation of this transaction have not been completed, and the evaluation value and transaction price of the underlying assets have not been determined.
Changhong Sanjie, formerly known as Jiangsu Sanjie new energy Co., Ltd., is mainly engaged in the R & D, design, production and sales of lithium-ion batteries. In October 2017, Changhong energy acquired 51% of the equity of Changhong Sanjie after the capital increase by means of cash acquisition of 120 million yuan and cash capital increase of 151 million yuan. At the end of 2016, the total amount paid by Changhong to the shareholders of the listed company (excluding the minority interests) was 97.7 billion yuan, accounting for 26.9% of the total net assets of the listed company at the end of the period, which accounted for 97.9% of the total amount of the audited target assets at the end of the period. In May 2021, Changhong energy purchased 15.83% of the equity of Changhong Sanjie with RMB 174 million in cash, raising the shareholding ratio of Changhong Sanjie to 66.83%.
dual product layout of alkali battery + lithium battery
Changhong energy was founded in October 2006, listed on the new third board in March 2016, and landed on the selected layer in February 2021. The actual controller of the company is Mianyang SASAC. Changhong energy started with alkaline zinc manganese battery. Relying on the acquisition of the equity of Changhong Sanjie, the company has formed a dual product layout of “alkali battery + lithium battery”.
Thanks to the high prosperity of the new energy track, Changhong energy’s performance has continued to grow steadily in the past few years. From 2018 to 2020, the company’s revenue was 1.071 billion yuan, 1.417 billion yuan and 1.952 billion yuan respectively, and the net profit attributable to the parent company was 62 million yuan, 105 million yuan and 162 million yuan respectively. In the first three quarters of 2021, Changhong energy’s performance soared again, with a revenue of 2.225 billion yuan, a year-on-year increase of 69.66%; The net profit attributable to the parent company was 203 million yuan, a year-on-year increase of 70.98%.
It is worth noting that after the acquisition of the equity of Changhong Sanjie in 2017, the lithium battery business has made an increasing contribution to the revenue of Changhong energy. In 2019, 2020 and January September 2021, the proportion of lithium battery business in the operating revenue of listed companies was 29.42%, 37.74% and 54.83% respectively, gradually becoming an important profit growth point of listed companies.
According to the disclosure of the plan, from January to September in 2019, 2020 and 2021, the operating revenue of Changhong Sanjie was 421 million yuan, 745 million yuan and 1237 million yuan respectively, and the net profit was 77 million yuan, 142 million yuan and 206 million yuan respectively.
Changhong Energy said that Changhong Sanjie has strong profitability and high asset quality. By acquiring a minority stake in Changhong Sanjie, the company will further aggregate high-quality lithium battery assets, thicken performance, improve the equity production capacity of some lithium battery businesses, enhance operating capacity, and bring good returns to the company and all shareholders.
Zheshang Securities Co.Ltd(601878) a research report pointed out that at present, lithium battery has gradually become the focus of Changhong energy business. The acquisition of Changhong Sanjie equity is intended to continuously increase the layout of lithium battery through wholly-owned holding and include high-quality lithium battery assets.
