\u3000\u3000 Jiangxi Jovo Energy Co.Ltd(605090) (605090)
Event: the company issued the plan for issuing shares, convertible corporate bonds and paying cash to purchase assets and raise supporting funds, and planned to issue shares, convertible corporate bonds and pay cash to all shareholders of Yuanfeng Sentai to purchase 100% of the shares of Yuanfeng Sentai held by them. Meanwhile, the company plans to issue convertible corporate bonds to no more than 35 specific investors to raise supporting funds.
Comments:
Acquisition of Yuanfeng Sentai, the future development of the company can be expected: the company plans to acquire 100% shares of Sentai energy by issuing shares, convertible corporate bonds and paying cash, and the transaction price is tentatively not higher than 1.8 billion yuan. The company shall pay no more than (including) 600 million yuan in cash and no less than (including) 1.2 billion yuan in issued shares and convertible corporate bonds (tentatively 10% by issuing shares and 90% by issuing convertible corporate bonds). The issuing price of the shares is 32.2 yuan / share, and the initial conversion price of convertible corporate bonds is priced with reference to the issuing price of the issued shares. Yuanfeng Sentai is mainly engaged in the production, logistics distribution and sales of LNG and high-purity helium, as well as the retail business of LNG filling stations and LNG / L-CNG filling stations. In 2020, Yuanfeng Sentai achieved a revenue of 1.39 billion yuan; The net profit attributable to the parent company was 30 million yuan. In 2021, Yuanfeng Sentai achieved a revenue of 2.34 billion yuan, a year-on-year increase of + 68%; The net profit attributable to the parent company was RMB 330 million, a year-on-year increase of + 958%. This acquisition can enhance the company’s industrial chain synergy and anti risk ability, promote the company’s sustainable and healthy development and open up future growth space.
Create a “Sea gas + land gas” dual gas source pattern and overweight LNG main business: Yuanfeng Sentai has a complete layout of the whole LNG industry chain, has stable LNG “land gas” resource supply and large-scale procurement cost advantages, has four LNG liquefaction plants in Inner Mongolia and Sichuan, and has a large-scale liquefaction production capacity with an annual output of nearly 600000 tons of LNG. Yuanfeng Sentai mainly purchases natural gas feed gas from PetroChina Southwest Oil and gas field, Changqing Oilfield and Zhejiang oilfield. PetroChina Southwest Oil and gas field produced 35.41 billion m3 of natural gas in 2021, an increase of 3.6 billion m3 over the same period in 2020. Yuanfeng Sentai’s LNG liquefaction plant in Sichuan has a stable long-term supply relationship, strong guarantee of feed gas resources, and has the advantage of large-scale procurement cost. As the largest major natural gas producing area in China, PetroChina Changqing Oilfield produces 1 / 4 of China’s total natural gas, which can meet the gas demand of 1.25 million m3 / day in Inner Mongolia Sentai for a long time. With the help of Yuanfeng Sentai’s inland gas source, the company is expected to hedge the risk of rising sea and air prices, realize the synergy and complementarity of sea and air and land gas, and the company’s market radiation range will rapidly expand from South China to southwest and northwest regions. Yuanfeng Sentai’s target market is mainly LNG vehicle fueling. The company will quickly enter the LNG vehicle fueling market and broaden the terminal application field. Through this acquisition, the company has promoted the implementation of the strategy of “on land, to the terminal and out of South China”, and improved the core competitiveness of the company.
Realize business innovation and arrange bog helium extraction project in advance: helium has the characteristics of low density, low boiling point, good thermal conductivity and stable chemical properties, which mainly exists in natural gas. At present, China relies on imports of high-purity helium, and the resource security situation is grim. Yuanfeng Sentai is one of the few enterprises in China with LNG project bog helium extraction technology. At present, it has applied for two invention patents and three utility model patents related to helium extraction. In May 2021, Inner Mongolia Sentai bog helium extraction project was successfully put into operation, and the purity of extracted helium was up to 99.999%. At present, Yuanfeng Sentai has planned to invest in the construction of Inner Mongolia Sentai natural gas liquid helium production project, including 100m3 / h helium unit, 50m3 / h helium liquefaction unit, storage and filling system, so as to further expand the advantages of helium industry. The company can make use of the advantages of bog helium extraction technology of Yuanfeng Sentai to layout bog helium extraction in advance and realize business innovation.
Actively carry out the layout of hydrogen energy industry and realize coordinated development: the company has obvious inherent advantages in participating in hydrogen energy industry, and will increase the layout in hydrogen energy field in the future. With the official launch of “Chengdu Chongqing hydrogen corridor”, the development of hydrogen energy industry in Southwest China is expected to usher in a period of rapid development. Yuanfeng Sentai has 3 LNG liquefaction plants in Southwest China, which is rich in low-cost hydropower resources and has strong resource advantages in using its own feed gas to carry out natural gas reforming to produce hydrogen; Meanwhile, Yuanfeng Sentai operates several LNG filling stations to provide important terminal support for the closed-loop development of the whole industrial chain of the company’s hydrogen energy business in the future. Taking advantage of Yuanfeng Sentai’s advantages in feed gas and gas filling stations, the company has distributed hydrogen energy industry across regions to achieve coordinated development.
The goal of carbon neutralization accelerates the transformation of energy consumption structure, and the company’s LNG business is expected to fully benefit: under the “double carbon” goal, natural gas, as a clean primary fossil energy, will be an important tool for China to slow down the growth rate of carbon emissions, and the demand for natural gas is expected to continue to rise. In addition, as China’s carbon trading market matures, the future rise in carbon prices will enhance the development value of the natural gas industry. According to the calculation of Chinese scholar Xu Bo and others in the analysis of China’s natural gas consumption trend in the 14th five year plan, China’s natural gas demand CAGR is expected to reach 5.8% from 2021 to 2025, and the company’s LNG business increment can be expected.
Profit forecast, valuation and rating: considering that the acquisition has not been completed, the impact of the acquisition of Yuanfeng Sentai on the company’s performance will not be considered for the time being. We maintain the profit forecast of the company. It is estimated that the net profit of the company from 2021 to 2023 will be RMB 1.038 billion, RMB 1.403 billion and RMB 1.818 billion respectively, and the corresponding EPS will be RMB 2.34, RMB 3.17 and RMB 4.10/share respectively, maintaining the “buy” rating.
Risk tips: macroeconomic fluctuation risk, RMB / US dollar exchange rate risk, upstream purchase price fluctuation risk, secondary new share price fluctuation risk, acquisition progress failure to meet the expected risk.
