Due to the rise in coal prices, Spic Dongfang Energy Corporation(000958) on the one hand, repurchased the equity of Liangcun thermal power held by ICBC investment, on the other hand, increased the amount of related party transactions.
On December 24, Spic Dongfang Energy Corporation(000958) announced that the company would repurchase 45.93% equity of Shijiazhuang Liangcun Thermal Power Co., Ltd. (hereinafter referred to as “Liangcun thermal power”). After the repurchase, Liangcun thermal power became a wholly-owned subsidiary of Spic Dongfang Energy Corporation(000958) and implemented capital reduction. At the same time, the related party transactions between the company and Hebei fuel of State Power Investment Group will exceed the expectation. The company will increase the amount of related party transactions by 260 million yuan according to the actual situation.
In an interview with the Securities Daily, Hu Qimu, chief researcher of Sinosteel Economic Research Institute, said: first, in the short term, from the perspective of investment income, the sharp rise in coal prices this year has made the operating efficiency of Liangcun thermal power less than expected, which has triggered the specific situation of negotiation exit agreed in the equity transfer contract. In the medium and long term, under the background of “double carbon”, the energy structure is facing adjustment, the proportion of thermal power in the energy structure will continue to decrease, and the relevant assets may face the risk of undervaluation. This is the consideration of ICBC’s investment to withdraw from thermal power from the Perspective of industrial policy orientation.
repurchase 45.93% equity of Liangcun thermal power held by ICBC investment
It is reported that Spic Dongfang Energy Corporation(000958) introduced ICBC investment to increase its capital with its wholly-owned subsidiary Liangcun thermal power as the target in 2018. The company signed the capital increase agreement and equity transfer contract with ICBC investment on December 6, 2018, successfully introduced ICBC investment as the investor of Liangcun thermal power, and introduced a market-oriented debt to equity capital of 850 million yuan (ICBC investment holds 45.93%). According to the agreement, the investment period is 3 + N and expires in December this year.
In view of the sharp rise of coal in 2021, large-scale losses in the thermal power industry, and the operating benefits of Liangcun thermal power are less than expected, ICBC investment has no intention to continue to invest when it expires this year. In view of the specific circumstances of negotiation exit agreed in the equity transfer contract, it is proposed that Spic Dongfang Energy Corporation(000958) implement repurchase after the maturity of market-oriented debt to equity swap funds (no later than December 27). Spic Dongfang Energy Corporation(000958) it is necessary to pay an equity repurchase amount of 854.2575 million yuan to repurchase 45.93% of the equity of Liangcun thermal power. After the repurchase, Liangcun thermal power was a wholly-owned subsidiary of Spic Dongfang Energy Corporation(000958) and implemented capital reduction to restore the equity structure of Liangcun thermal power to the state before introducing the market-oriented debt to equity capital invested by ICBC, that is, the registered capital of Liangcun thermal power was 609646900 yuan.
The announcement shows that the main business scope of Liangcun thermal power is the development and construction of thermal power projects; Production and sales of electricity and heat; Power distribution business; Comprehensive utilization of fly ash; Power high-tech development and consulting services; Self owned house lease; Production and sales of demineralized water; Urban centralized cooling development. At present, Spic Dongfang Energy Corporation(000958) has a shareholding ratio of 54.07%, and the total installed capacity of Liangcun thermal power is 660MW. As of September 30, 2021, Liangcun thermal power has total assets of RMB 2.605 billion, total liabilities of RMB 961 million and owner’s equity of RMB 1.645 billion. Among them, ICBC invested 850 million yuan in debt to equity swap, and the undistributed profit was 16.8619 million yuan. From January to September, Liangcun thermal power realized a cumulative net profit of -23.735 million yuan.
Spic Dongfang Energy Corporation(000958) said that the company’s acquisition of the equity of Liangcun thermal power held by ICBC investment is mainly to fulfill the contract. At the same time, the company believes that with the national macro-control of coal price and the market-oriented reform of electricity price, the most difficult time in the thermal power industry has passed. At this time, the company’s acquisition of the equity of Liangcun thermal power is conducive to enhancing the company’s medium and long-term development and profitability.
Hu Qimu said, “The sharp rise in coal prices this year has led to a large loss in the thermal power industry. However, a series of recent central meetings have emphasized the dominant position of coal power in the current energy structure, which is an objective reality. In the future, in the process of energy structure adjustment, the public utility attribute of power peak regulation and supply guarantee of thermal power will be enhanced, and in the process of coal market and planned motor system adjustment In, thermal power enterprises will still have stable cash flow through the transformation of profit model.
increased the amount of related party transactions by 260 million yuan
It is worth mentioning that Spic Dongfang Energy Corporation(000958) not only repurchased the equity of Liangcun thermal power held by ICBC investment, but also increased the amount of related party transactions, which are related to the rise of coal prices.
On December 24, Spic Dongfang Energy Corporation(000958) announced that due to the sharp rise in coal prices in 2021, the related party transactions between the company and Hebei fuel of State Power Investment Group will exceed the expectation. The company will increase the amount of related party transactions by 260 million yuan according to the actual situation. By the end of October 2021, the company had purchased 825 million yuan of fuel from Hebei.
In addition, it is worth mentioning that, affected by the rise in coal prices, Spic Dongfang Energy Corporation(000958) realized a net profit of 185 million yuan attributable to shareholders of Listed Companies in the third quarter, a decrease of 35.34% over the same period last year.
Although the thermal power industry is suffering in 2021, the continuous sharp rise in the prices of coal and natural gas has doubled the operating pressure of the thermal power industry and even led to losses. It has also triggered power restriction measures that have not occurred in some regions for many years, and the state has also strengthened the dual control of energy consumption, many experts told the Securities Daily, This phenomenon will be alleviated in 2022.
Zhai Kun, chief analyst of public utilities and coal, “The power shortage events since 2021, on the one hand, promote the reform of coal electricity price mechanism, the coal electricity price will no longer fall unilaterally, and the floating space will be expanded to 20%; on the other hand, face up to the indispensable position of coal electricity in building a new power system. On December 10, the central economic conference proposed to be based on the basic national conditions dominated by coal, and the gradual withdrawal of traditional energy should be based on the security of new energy Promote the coordinated development of coal power and new energy on the basis of substitution. At present, the coal price range is determined in 2022, and power enterprises are required to cover 100%. We calculate that under the condition that the electricity price can rise by 20%, the profits of coal and power enterprises can be guaranteed. At the same time, the coal power linkage may be restarted, and the profit of thermal power will tend to be stable under the smooth transmission mechanism. ”
Qi Haizhen, President of Beijing Teyi sunshine new energy, told the Securities Daily, “Under the situation that China is dominated by coal consumption, the state has also introduced the measures of electricity price marketization reform, and is gradually establishing the transmission mechanism of electricity price, which is an urgent need and the foundation of survival for thermal power enterprises. However, this does not mean that thermal power enterprises can give up the emission reduction target and reduce the pressure of energy consumption on the basis of ensuring the normal production and operation of enterprises In fact, the most important thing is to make power products cleaner and energy-saving. It is also the foundation for enterprises to achieve long-term development. Although the operating pressure of thermal power enterprises will be relieved next year, and under the expectation of rising prices of power products, enterprises should achieve better benefits, transformation and upgrading and appropriate new energy layout are the correct “broad road”.
Bai Wenxi, chief economist of IPG China, also said: “the thermal power industry will perform poorly in 2021 due to the impact of excessive rise in coal price and lagging adjustment of on grid electricity price, but it will improve overall in 2022 with the implementation of coal power price linkage mechanism”.
(Securities Daily)
