\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 803 Enn Natural Gas Co.Ltd(600803) )
Event: the company issued the report on issuing shares and paying cash to purchase assets and related party transactions, and planned to purchase 90% equity of ENN Zhoushan held by ENN technology, ENN group and ENN holdings by issuing shares and paying cash, with a transaction consideration of 8.55 billion yuan.
The implementation of the transaction plan for the acquisition of ENN Zhoushan: the company purchases 90% of the equity of ENN Zhoushan by issuing shares and paying cash. According to the company’s announcement, the evaluation value of 100% equity of ENN Zhoushan is 9.528 billion yuan, the evaluation value of 90% equity is 8.575 billion yuan, and the transaction consideration is finally determined to be 8.55 billion yuan. Prior to the acquisition, the controlling shareholder of ENN Zhoushan was ENN technology, holding 70% of the company’s equity, and ENN group, prism energy and ENN holdings held 15%, 10% and 5% of the company’s equity respectively. Enn Natural Gas Co.Ltd(600803) plans to acquire 45% equity of ENN Zhoushan from ENN technology by issuing shares. Based on the transaction consideration of RMB 4.275 billion and the issuance price of RMB 1.722/share, the number of shares issued this time is 248 million; At the same time, 25%, 15% and 5% of the equity held by ENN technology, ENN group and ENN holdings were purchased in cash, and 2.375, 1.425 and 475 billion yuan were paid in cash, totaling 4.275 billion yuan.
Compared with the scheme of Kunlun energy Dalian LNG terminal, the company’s consideration for this transaction is relatively low: considering that the transaction time and receiving capacity of Xin’ao Zhoushan LNG terminal and Dalian LNG terminal are similar, we take the scheme of Kunlun energy Dalian LNG terminal as the benchmark. Kunlun energy purchased 75% equity of Dalian LNG terminal from the national pipe network group at the end of 2020. According to the company’s announcement, the evaluation value of 100% equity of Dalian LNG Company is 9.99 billion yuan, with LNG receiving capacity of 6 million tons / year, net profit of 487 million yuan in 2020, and the corresponding company is about 20.5 times PE. The net profit of Zhoushan LNG terminal in 2021 is 636 million yuan. Based on this calculation, Enn Natural Gas Co.Ltd(600803) is about 14.98 times PE into the assets of Zhoushan LNG terminal. The consideration of this transaction is relatively low. Meanwhile, according to the performance commitment disclosed in the company’s announcement, the net profit deducted from non parent company of ENN Zhoushan from 2022 to 2025 will not be less than 350 million yuan, 639 million yuan, 933 million yuan and 1.196 billion yuan respectively. After the assets are placed, the operation efficiency and performance of the terminal are expected to grow steadily with the ramp up of the capacity of the terminal.
Further improve the layout of the whole upstream, middle and downstream industrial chain after asset injection: according to the company’s announcement, at present, phase I and phase II of Zhoushan LNG terminal have been put into operation, with a processing capacity of 8 million tons / year, and the processing capacity is expected to reach 10 million tons / year after the completion of phase III. at the same time, the direct gas volume relying on the direct gas business of the terminal will reach 4.1 billion m3 in 2021, with a net profit of about 679 million yuan. After this asset injection, the company will comprehensively improve the layout of the whole industrial chain in the upstream, middle and downstream, and the upstream has diversified natural gas supply subjects and channels; The midstream LNG terminal gives full play to its receiving, storage and transportation capacity, and its wharf warehousing and logistics business and direct gas business will become an important support for the company’s future performance growth; The territory of downstream urban fuel gas is further expanded, and actively expand to the field of comprehensive energy services based on urban fuel gas. At present, as the leader of China’s natural gas with international trade capacity, the company is expected to benefit from the opportunities in the field of international natural gas trade under the background of rising natural gas prices in Europe.
Relying on the terminal, the company has signed a large number of competitive LNG long-term agreements to lay a long-term growth momentum: Recently, the company has signed LNG long-term agreements with many overseas suppliers. In October 2021, the company signed a 13 year long-term LNG purchase and sale agreement with chenille energy, the world’s second largest LNG liquefaction plant operator, to purchase 900000 tons of LNG annually by offshore delivery from July 2022; In January 2022, the company signed an 11 year long-term LNG agreement with novatech of Russia to purchase about Shanghai Pudong Development Bank Co.Ltd(600000) tons of LNG per year by means of onshore delivery; In March 2022, Enn Natural Gas Co.Ltd(600803) , ENN energy signed a 20-year long-term LNG agreement with energytransferlp respectively. The annual supply of LNG is 1.8 million tons and 900000 tons respectively, which will be delivered from 2026; In April 2022, subsidiary ennlng signed a 20-year long-term LNG agreement with Rio Grande LNG, with an annual supply of 1.5 million tons of LNG, which will be delivered from 2026. Since October last year, the company has signed a total of 5.7 million T / a LNG long-term association, with obvious price competitive advantage. Relying on Zhoushan LNG terminal, the company locks in low-cost gas sources in multiple directions, further optimizes the cost of gas sources, and builds a solid barrier on the cost side.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be 116957 billion yuan, 139807 billion yuan and 160637 billion yuan respectively, with growth rates of 0.8%, 19.5% and 14.9% respectively, and the net profit will be 5.568 billion yuan, 6.173 billion yuan and 7.042 billion yuan respectively, with growth rates of 35.8%, 10.9% and 14.1% respectively, and the corresponding PE will be 9.6, 8.7 and 7.6 times respectively, with outstanding growth; Maintain the investment rating of Buy-A, and the six-month target price is 25.0 yuan.
Risk tips: the risk that the demand for natural gas is less than expected, the risk of overseas LNG price fluctuation, the risk of coal price decline, and the risk that the acquisition progress of ENN Zhoushan is less than expected.
