Securities abbreviation: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Stock Code: 601669 Announcement No.: pro 2022-007 Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669)
About asset replacement with China Power Construction Group Co., Ltd
And related party transactions
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (hereinafter referred to as “the company”) intends to carry out asset replacement (hereinafter referred to as “the transaction”) with the controlling shareholder China Power Construction Group Co., Ltd. (hereinafter referred to as “the power construction group”), which constitutes a related party transaction. For the matters related to this transaction to be considered at the first extraordinary general meeting of the company in 2022, the related shareholders did not communicate with and did not plan to communicate with other shareholders on their voting opinions, and will avoid voting in the voting of this general meeting of shareholders.
Among the assets placed in this asset replacement, the subject company Shanghai Electric Power Co.Ltd(600021) Design Institute Co., Ltd. (hereinafter referred to as “Shanghai Institute”) has an estimated appreciation rate of 193.21%. Please pay attention to transaction risks and exercise voting rights prudently.
The company was posted on the website of Shanghai Stock Exchange (www.sse. Com.. CN.) on January 7, 2022 The notice of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) on convening the first extraordinary general meeting of shareholders in 2022 has been issued, and the relevant matters for convening this general meeting are as follows:
1、 Basic information of the meeting
1. Meeting time: January 24, 2022.
2. Equity registration date: January 18, 2022.
3. The online voting system adopted by the general meeting of shareholders: the online voting system of the general meeting of shareholders of Shanghai Stock Exchange.
4. To review the proposals related to this transaction: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) proposal on asset replacement and related party transactions with China Power Construction Group Co., Ltd. Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) proposal on external guarantee of the company to be placed in the asset subject matter in asset replacement Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) proposal on the commitment of controlling shareholders to change and avoid horizontal competition.
2、 Overview of related party transactions
In order to properly solve the horizontal competition between the power construction group and the company, the company plans to replace the assets with the power construction group. The company will replace the real estate sector assets held by the company (hereinafter referred to as “purchased assets”) with the high-quality power grid auxiliary industry related assets held by the power construction group (hereinafter referred to as “purchased assets”). The transaction is planned to be conducted by means of non-public agreement transfer. The assessed value of owner’s equity (excluding perpetual bonds) of the assets as of the benchmark date of August 31, 2021 is RMB 24718805600, and the assessed value of owner’s equity (excluding perpetual bonds) of the assets as of the benchmark date of August 31, 2021 is RMB 2465346300. The difference between disposed assets and disposed assets is 65.3426 million yuan, which is paid to the company by power construction group in cash. For details, please refer to Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) announcement on asset replacement and related party transactions with China Power Construction Group Co., Ltd. disclosed on the website of Shanghai Stock Exchange on the same day.
Power construction group, the counterparty of this transaction, is the controlling shareholder of the company. Therefore, this transaction constitutes a related party transaction of the company.
3、 Risk tips and instructions
The transaction price of this connected transaction is determined based on the appraisal value on August 31, 2021 as the appraisal base date. According to the asset appraisal report (Zhonglian pingbao Zi [2021] No. 3793) issued by Zhonglian asset appraisal group Co., Ltd., as of August 31, 2021, the book net assets of the subject company, Shanghai Institute, were RMB 671.5939 million, the net asset appraisal was RMB 1969.1611 million, and the appraisal method was income method, The estimated value-added rate was 193.21%. In view of the high value-added rate of assets appraisal of Shanghai Institute, the following tips and explanations are made on the relevant risks involved in the above situation:
1. Shanghai Institute is mainly engaged in design, consulting and other businesses in the power industry. Among them, urban power grid (underground substation, cable tunnel), integrated energy, energy Internet and contract energy management business are in a leading position in China’s energy engineering consulting and design industry. In terms of business, Shanghai institute faces relatively stable industries and customers, its own business ability is also prominent, and has reliable income expectation; In terms of finance, Shanghai Institute has strong comprehensive profitability, high overall gross profit margin, no interest payment debt, and less financial pressure during the operation period. To sum up, it is expected that Shanghai Institute will have a stable source of profit and cash inflow in the future. The income method can truly reflect the market value of all shareholders’ equity of Shanghai Institute on the benchmark date, and it is reasonable that the appreciation rate exceeds 100%. 2. In view of the assessment value-added rate exceeding 100%, Tianzhi International Certified Public Accountants (special general partnership) has issued the audit report on profit forecast of Shanghai Electric Power Co.Ltd(600021) Design Institute Co., Ltd. (Tianzhi Zi [2021] No. 47056) and reviewed the profit forecast of Shanghai Institute from September to December 2021 and 2022.
3. The counterparty Power Construction Group has made a commitment to the total net profit of Shanghai Institute during the profit compensation period (2022-2024), and made cash compensation to the company for the part where the accumulated net profit realized during the profit compensation period is less than the committed net profit, subject to the transaction price of 50% equity of Shanghai Institute in this transaction.
4. As of the disclosure date of this announcement, the operation of Shanghai Institute is in good condition, the business and profit prospects are stable, and the above performance commitments are realizable. Although intermediaries are diligent and responsible in their practice, strictly implement the necessary procedures and follow the principles of independence, objectivity, scientificity and impartiality, due to the unpredictable adverse effects of macro-economy, regulatory policies and industry control, there may still be inconsistencies between the actual situation in the future and the performance forecast. Investors are reminded to pay attention to the risks of higher value-added rate, lower profit than expected and impossible achievement of performance commitments assessed by Shanghai Institute in this transaction.
5. For this transaction, PowerChina group has not communicated with and plans to communicate with other shareholders on voting opinions, and will avoid voting in the voting of this general meeting of shareholders.
6. Please pay attention to the relevant risk tips disclosed in this announcement and exercise your voting rights carefully. It is hereby announced.
Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) board of directors January 7, 2002
