Event:
Completion of share exchange, absorption and merger Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) and return of Longyuan Power to a shares: on the evening of January 20, 2022, Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) (000780. SZ) announced that the listing of the company’s shares would be terminated and delisted from January 24, 2022. At the same time, Longyuan Power was listed on Shenzhen Stock Exchange, referred to as “Longyuan Power” for short and code “001289”.
Key investment points:
Longyuan Power has completed the share exchange and merger Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) and will be listed on A-Shares on January 24. On December 31, 2020, Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) planned to suspend the trading of major asset restructuring, and announced that Longyuan Power would issue A-Shares for share exchange, absorb and merge Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) and replace major assets. On June 5, 2021, the restructuring plan was approved by SASAC. On December 8, 2021, the merger was approved by the CSRC. On December 17, 2021, Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) was suspended and entered the stage of cash option distribution, exercise declaration, exercise liquidation and settlement. On January 20, 2022, Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) announced that on January 24, Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) terminated its listing and delisted, and Longyuan Power will be listed on Shenzhen Stock Exchange, referred to as “Longyuan Power” for short, with code “001289”.
The share exchange ratio of this transaction is 1 share Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) for 0.3407 shares of Longyuan Power. According to the calculation of the closing price of Pingneng before the suspension of trading, the share price of Longyuan after the resumption of trading is 32.14 yuan / share, which corresponds to the market value of about 270 billion yuan. According to the predicted net profit of 7 billion yuan in 2022 (wind unanimously predicted that on January 20, 2022), it corresponds to about 38 times of PE in 2022, At present, Hong Kong stocks unanimously predict that PE is only 16 times (January 20, 2022), and the discount range is 57%. Hong Kong stocks are obviously undervalued.
In this transaction, Longyuan Power will purchase new energy assets from Liaoning electric power, Shaanxi electric power, Guangxi electric power, Yunnan electric power, Gansu Electric Power and North China electric power, other subsidiaries of the national energy group, in addition to returning to A-share through absorption and merger of Inner Mongolia Pingzhuang Energy Resources Co.Ltd(000780) . The injection of core assets will further promote the intensive allocation of internal resources and consolidate Longyuan’s leading position in the industry.
Longyuan Power’s return may trigger the listing of more new energy core assets A shares. Longyuan Power’s return this time is the second pure green power core asset landing A-Shares after China Three Gorges Renewables (Group) Co.Ltd(600905) . After the completion of this transaction, Longyuan Power realized the dual listing of a + H shares, and the financing channels were further widened. Under the industry leading demonstration effect, more new energy core assets are expected to return to the A-share market. In 2020, Huadian Fuxin completed privatization and delisted from Hong Kong stocks; In July 2021, Huadian Power International Corporation Limited(600027) injected new energy assets into Fuxin development; In December 2021, Fuxin development completed the capital increase, introduced 13 strategic investors such as China Life Insurance Company Limited(601628) , China Guoxin, the national green development fund and China Southern Power Grid, and raised 15 billion yuan. CGN wind power introduced 14 strategic investors including the national social security fund, the State Grid and China Southern Power Grid in November 2021, raising 30.53 billion yuan. The introduction of war investment has been completed, and the pace of A-share listing is approaching. With the leading enterprises listed on the A-share market, the capital volume of the green power sector has been further expanded and the sector effect has been further strengthened.
The correction of green power sector in the beginning of the year is mainly due to the short-term emotional impact, and the long-term opportunities of green power under the main line of carbon neutralization remain unchanged. Previously, the policy set the tone of steady growth, causing the market to worry about the policy shift. In fact, the continuous promotion of scenery investment is in line with the tone of steady growth, and the installed capacity of coal-fired power will also ensure the consumption of green power. In 2022, the floating range of electricity price will be increased to 20% and under the tight balance pattern of power supply, the electricity price center is expected to move up in 2022, the profit of thermal power will be repaired, and the green power transaction premium will rise.
Industry rating and investment strategy the return of high-quality new energy assets to A-Shares is expected to boost the green power sector, and the adjustment caused by short-term sentiment is expected to be gradually repaired. Therefore, we maintain the “recommended” rating of the industry.
Focus on recommending individual stocks. It is suggested to pay attention to Longyuan Power, Tianjin Guangyu Development Co.Ltd(000537) , China Three Gorges Renewables (Group) Co.Ltd(600905) , Nyocor Co.Ltd(600821) , Cecep Wind-Power Corporation(601016) , Cecep Solar Energy Co.Ltd(000591) , Jilin Electric Power Co.Ltd(000875) , Zhongmin Energy Co.Ltd(600163) , China National Nuclear Power Co.Ltd(601985) which are the high-quality targets of green power; Huaneng Power International Inc(600011) , China Resources Power, Shanghai Electric Power Co.Ltd(600021) , Fujian Funeng Co.Ltd(600483) , Huadian Power International Corporation Limited(600027) , Guangzhou Development Group Incorporated(600098) , Guangdong Electric Power Development Co.Ltd(000539) , Shenergy Company Limited(600642) of thermal power transformation to new energy; Distributed photovoltaic field Jinko Power Technology Co.Ltd(601778) , Zhejiang Chint Electrics Co.Ltd(601877) , Jiangsu Linyang Energy Co.Ltd(601222) , Ganghua gas, Skyworth Group, Zhejiang Sunoren Solar Technology Co.Ltd(603105) , Hangzhou Star Shuaier Electric Appliance Co.Ltd(002860) .
Risk tips focus on the company’s performance is less than expected, new energy installation is less than expected, asset integration is less than expected, power demand is less than expected, downward risk of electricity price and risk of policy change.
