2021 is the first year of the 14th five year plan. The reorganization of central enterprises has surprised the market and handed in a bright report card. With the arrival of 2022, the first 10 billion level reorganization of central enterprises this year has finally been settled.
Recently, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (hereinafter referred to as ” Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) “) announced that in order to properly solve the horizontal competition between power construction group and the company, the company plans to replace the assets with the controlling shareholder power construction group, and the company will replace the real estate assets held by the company with the high-quality power grid auxiliary assets held by power construction group.
Wu Gangliang, a researcher of China enterprise reform and Development Research Association, told the Huaxia times: “in recent years, some central enterprises have experienced uneven development and overcapacity in the industrial sector. Asset restructuring can integrate advantageous resources, reduce homogeneous competition, supplement the shortcomings of the industrial chain, and expand the scale and anti risk ability of the advantageous sector of central enterprises.”
Sun Liancai, partner of Peking University Zongheng management consulting group, told our reporter: ” Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) The reorganization of central enterprises of HEPC group, on the one hand, is the requirement of the three-year action of state-owned enterprise reform, which conforms to the development of the times; The other is the specific action steps of benchmarking world-class enterprises. Asset restructuring is not only to expand the scale of enterprises, but also to supplement the short board business sector of enterprises and create stronger core competitiveness of central enterprises. “
Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) de real estate
According to the announcement, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) plans to replace its assets in the real estate sector valued at 24.719 billion with 24.653 billion high-quality grid auxiliary assets held by power construction group.
Among them, the assets purchased are 100% equity of power construction real estate held by Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , Beijing Feiyue Lingkong Technology Industry Development Co., Ltd. and Tianjin Haifu Real Estate Development Co., Ltd; The invested assets are the equity of 18 companies, including Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) group Huazhong electric power design and Research Institute Co., Ltd., Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Group Hebei Electric Power Survey, design and Research Institute Co., Ltd., Sichuan Electric Power Design Consulting Co., Ltd., Shanghai Electric Power Co.Ltd(600021) Design Institute Co., Ltd.
The reorganization of central enterprises is not new, but the relationship between the two central enterprises in this capital reorganization is worth mentioning.
It is worth noting that the announcement mentioned that power construction group is the controlling shareholder of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , holds 58.34% equity of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , and this asset replacement directly involves 24.719 billion real estate assets. Then, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and what are the reasons for the reorganization and asset replacement of central enterprises of power construction group?
In fact, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) has long been willing to replace assets. In 2020, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) disclosed to the outside world its idea of planning asset replacement with the controlling shareholder, and tried to restructure assets with Wuhan old real estate enterprise Langold Real Estate Co.Ltd(002305) to realize the stripping of power construction real estate. Even in order to realize asset replacement, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) has implemented “debt to equity swap” for its subsidiaries. In December 2020, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) implemented the “debt to equity swap” for its subsidiary Tianjin Haifu, and the amount of debt to equity swap was 16.3 billion yuan.
So why should Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) stick to asset replacement?
It can be seen from the financial report of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) . According to the Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) annual report, from 2017 to 2019, the real estate development business that Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) was proud of suffered a sharp decline, realizing revenue in three years, and the contribution ratio of real estate to total revenue decreased from 6.95% to 5.43%; The gross profit margin of the real estate sector decreased from 22.55% to 19%.
The loss of the real estate sector may be the reason why Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) is committed to replacing these assets.
Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) the advantages of asset restructuring outweigh the disadvantages
After the reorganization of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and power construction group, it not only alleviates the problem of poor business in Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) real estate sector, but also replaces the high-quality power grid auxiliary industry of power construction group, which can also reduce the internal competition in the same industry to a certain extent.
Wu Gangliang told the Huaxia times that in recent years, some central enterprises have experienced uneven development and overcapacity in the industrial sector. Asset restructuring can integrate advantageous resources, reduce homogeneous competition, supplement the short board of the industrial chain, and expand the scale and anti risk ability of the advantageous sector of central enterprises.
Sun Liancai also said that since the reorganization of central enterprises, the in-depth promotion stage of state-owned enterprise reform has significantly accelerated the pace of the reorganization of central enterprises. The reorganization of central enterprises of Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and power construction group, on the one hand, is the requirement of three-year action of state-owned enterprise reform, which conforms to the development of the times; On the other hand, it is the specific action steps of benchmarking world-class enterprises. Asset restructuring is not only to expand the enterprise scale, but also to supplement the enterprise short board business sector and create a stronger core competitiveness of central enterprises.
Moreover, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and power construction group are originally one. Changing the real estate sector resources to power construction group does not completely release the real estate resources to others, which obviously has more advantages than disadvantages for Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) .
