Changjiang Power: Return of the King

Reporter Pan Yesterday, suspension of a year long of the Yangtze River Power complex card. Although the opening slightly down 0.35%, but soon after the market funds sought after, turned the impact of a surge in trading, once led the Power Plate led a A-share Yangtze River Power in the "major assets reorganization matters" suspended for a year after the return of the king yesterday. Although the Shanghai Composite index fell from 3,700 points to 1664 points during the Changjiang power suspension, it rose back to 2,600 points from 1664 points, with a cumulative decline of more than 26%.　　However, industry insiders said that the restructuring of the Yangtze River Power performance has been significantly improved, the future trend is worth watching. The reorganization plan dust settles in Friday, the Changjiang power issued a notice, the company board of Directors has considered passed the "China Changjiang Power Co., Ltd. major assets reorganization plan" bill.　　The announcement shows that the company intends to undertake debt, to the Three Gorges Corporation Non-public issue shares and pay cash, the acquisition of the Three Gorges Corporation held the target assets, including the Three Gorges hydropower Station 18 stand-alone 700,000-kilowatt of the generator sets and related power generation facilities and 6 auxiliary production specialization companies. Changjiang Power will pay a total of 107.5 billion yuan in the price, including the target assets related to the debt of about 50 billion yuan, including the Three Gorges debt, foreign exchange loans and renminbi borrowings; at the same time, the company intends to the Three Gorges Corporation non-public offering shares about 1.552 billion shares, the issue price of 12.89 yuan/share, a total　　In addition, the company will pay a cash of about 37.5 billion yuan to the Three Gorges Corporation.　　According to the Yangtze River Power Quarterly, the current total assets of only 57.696 billion yuan, the acquisition of the company is undoubtedly a "snake swallow Elephant" drama, once the reorganization is completed, the company's total assets will reach 165.2 billion yuan, and thus become China's largest hydropower listed companies. People with good investment value said the announcement of the restructuring plan is the best profit at this stage of the scheme. On the one hand, the scheme does not involve the Three Gorges underground unit under construction, upstream Jinsha River under construction and the Three Gorges hydropower station of the public welfare assets. Compared to the Three Gorges Corporation's total assets loaded in a plan, step-by-step program can avoid the impact of non-profit assets on performance, to improve the current company's profitability. On the other hand, the Yangtze River Power acquisition of hydropower assets to take equity financing and debt financing of the basic ratio of 2:8, the proportion of equity financing is below market expectations, the dilution of earnings per share is also lower than expected, and the large shareholder's 12.89 yuan/share of the subscription price and overweight commitment can also reduce the investment risk of investors.　　It can be said that the plan fully take into account the interests of the circulation of shareholders, the current price has strong support. In the long run, the power of the Changjiang River still has a lot of assets to inject, including the Three Gorges underground power station under construction and the Jinsha River upstream power station and other assets. At present, the company has a more abundant cash flow to support the projects under construction, reduce future financing. In addition, the company can also rely on the decline in financial costs and the sale of shares, equity participation in the performance of the increase in investment income to ensure that there is no unit acquisition brought about by the growth of the problem. Therefore, the Changjiang electricForce is a very good long-term investment variety. From a valuation point of view, if assets are delivered as scheduled on June 30, the firm's dynamic P/E ratios will remain at 20 times in the next few years and, without considering the valuation premium for ancillary manufacturing companies, the reorganization is equivalent to 1.28 times times the PB acquisition of power assets, below the industry average. Moreover, under the background of the gradual implementation of electricity price system reform, especially with the large-scale popularization of direct power supply, there is still room for raising the price of large hydroelectric power.