Mo DAO plan comes out late vintage wine more mellow

——— Changjiang Electric Power (600900) interpretation of major assets reorganization plan Zhongyuan Securities Institute Panhang Changjiang Power (600900) after a year's suspension, finally announced a major asset reorganization plan. The target assets are: Controlling shareholder China Three Gorges hydropower station 8 700,000-kilowatt Terrestrial generator sets and corresponding dams, power plants, common power generation facilities, such as the main generation assets, and power generation business directly related to production facilities, and China Three Gorges Corporation has 6 auxiliary manufacturing specialization Company's equity. The initial assessment value of the target assets is about 107.5 billion yuan, the Yangtze River power to undertake debt to pay about 50 billion yuan, in the way of Non-public offering shares of the price of about 20 billion yuan, in cash to pay about 37.5 billion yuan.　　The additional price is 12.89 yuan per share, issued about 1.552 billion shares.　　The major asset reorganization of the Changjiang electric power is an example of the largest asset scale in the asset reorganization of the power enterprises, which has a milestone significance in the reorganization and integration of the central enterprises. The Yangtze River Power assets reorganization has four main background: the first background, is the current party Central Committee and the State Council regarding the state-owned capital adjustment and the state-owned enterprise reorganization's series of policies clearly proposed, promotes the state-owned capital to the important profession and the key domain centralism, must revolve the enterprise main business, the　　, the state-owned enterprises should speed up the reform of shareholding system according to the requirements of modern enterprise systems, encourage and support the enterprises with good assets or main business to realize the whole listing, and encourage the listed state-owned holding companies to inject their main business assets into listed companies through the way of increasing capital and acquiring assets. China Three Gorges Corporation has been established for 16 years, is currently in the strategic transformation period, is from the single project construction management to the basin Cascade rolling development of the multiple project construction and operation of the group Management change, and adapt to group management organizational structure, control mode has not been fully established, Internal incentive and restraint mechanism can not meet the needs of market competition. In the past, the mode of "split listing and gradual acquisition" led to the Three Gorges power plant assets in two main bodies, the development and construction of hydropower main industry and production Operation function division, the market competition pressure can not be smoothly transmitted.　　With the Yangtze River Power as the platform to achieve the overall listing, these problems can be effectively resolved, and can be established with the development strategy to adapt to the organizational structure, to achieve the transformation of the group management, is conducive to the improvement of China's Three Gorges Corporation's governance structure, transformation of operating mechanisms to promote future development. The second background, the Three Gorges project is about to be completed, the Three Gorges hydropower station on the ground units have been put into production. The Three Gorges project is the key backbone project of harnessing and developing the Yangtze River, which has great influence on national economy and social development. At present, the comprehensive benefits of flood control, power generation, shipping and ecology of the Three Gorges Project have been preliminarily played. After the water level of the Three Gorges Reservoir reaches the design elevation of 175 meters, the flood control capacity can reach 22.1 billion cubic meters, which can effectively alleviate the flood control pressure in the middle and lower reaches of the Yangtze River. But flood control, shipping and other public functions and the management of power generation operation of the management system needs to comb positioning,The internal and external coordination mechanisms involved in the operation management of the hub need to be clarified. The model of the 2003 Changjiang Power Restructuring and listing, and the gradual acquisition, is based on the choice of the circumstances. But in the future, if we continue to use the way of selling the Three Gorges unit for a long time, the main responsibility of the public assets and management of the Three Gorges project is not clear enough, and the system of public welfare assets is not clear enough. Therefore, in order to make a long-term system arrangement for the construction of the Three Gorges Project and the optimization of the Three Gorges power generation assets, to realize the integration of the power generation assets of the Three Gorges project, we must take the overall listing of the main business and solve the long-term financing of flood control, shipping and ecology.　　To establish a long-term mechanism to ensure comprehensive benefits of the Three Gorges Project. The third background, is the China Three Gorges Corporation will all main hydroelectric assets into the Yangtze River Power, so that it becomes China's electric power enterprises in the overall listing of assets into the largest listed companies. According to the disclosure of major asset reorganization plans, China's Three Gorges Corporation injected assets into the scale of 107.5 billion yuan, including the Three Gorges power plant assets, as well as the Yangtze River Power business related to equity investment, the scale of assets unprecedented. At the same time, the Yangtze River Power will be hydropower production, operation, sales integration, more complete industrial chain, corporate governance more standardized, will significantly improve the core competitiveness of the Yangtze River Power.　　Whether the Changjiang electric power can successfully complete the whole listing work will also play an important role in establishing the image of the Changjiang power market. The fourth background, from the current capital market view, financial turmoil swept the world, it can be said that the Yangtze River power at this time to start the reorganization of assets is "untimely", facing enormous challenges, but also contains opportunities in the challenges, cleverly designed to avoid the restructuring may bring difficulties, reduce the negative impact on the enterprise, will be the difficult to restructure the Changjiang electric power. It is in this context, the Yangtze River Power must give priority to the company's market performance and company performance, carefully designed, discussed, calculation of various programs, before the formation of the current major assets reorganization plan.　　We believe that this is the most advantageous to the Yangtze River power of a trading method for the Yangtze River power to follow the development of a good foundation for the following let us savor this bodes well for the future of China's hydropower brilliant vintage. Recently, the capital market on the overall listing of central enterprises in the subject of speculation, in various industries are also successful completion of the classic cases; The State Council's opinion on deepening economic system reform clearly points out that we should speed up the reform of shareholding system of State-owned enterprises and support the enterprises with conditions to realize the overall listing , the State Council SASAC and China Securities Regulatory Commission also explicitly support the enterprises with good assets of the main business to achieve the overall listing, and encourage state-owned holding companies to inject their main business assets into listed companies through the means of increasing capital and acquiring assets. The Yangtze River Power restructuring is in such a large background, in response to the national call, the enterprise quality assets into the same listed companies, it also improves the intrinsic value of the enterprise.　　Since 1994, the Three Gorges Project has been officially started, the construction quality is generally good, the Three Gorges main project has been basically completed at the end of 2008, 26 units on the ground all put into production, the 2008 flood season to achieve the test water level 172 meters, with a one-time injection of the basic conditions of the Yangtze River　　Changjiang Electric Power (600900) since the listing in 2003, with the construction of the Three Gorges Project has been successfully promoted, has acquired the Three Gorges Project 8 generator sets, to achieve the business scale and operating efficiency of the steady improvement in the capital market to establish high-quality blue chip image.　　The major assets reorganization plan combined with China's Three Gorges Corporation and the Yangtze River Power development needs, China's Three Gorges Corporation will take the Yangtze River Power as a platform, the Three Gorges project power generation assets into the whole, to support the Yangtze River power bigger and stronger. Since May 8, 2008, the Yangtze River Power stock suspension, the company launched a reorganization of the design, audit, asset assessment and other work. As the reorganization involves a wide range of assets, complex trading structure, after a lot of argumentation and calculation, China's Three Gorges Corporation and the Yangtze River power to cooperate, the reorganization plan only "long-awaited start out." The large scale of assets involved in the Yangtze River Power reorganization is rare, including the Three Gorges Project power generation assets (mainly for the Three Gorges hydropower station 18 units and public ancillary services) and utilities related to the equity investment (including wholly owned or controlled six auxiliary production specialized companies).　　The target assets in the preliminary estimate of about 107.5 billion yuan, these high-quality assets will be all loaded into the listed companies, and the Yangtze River power to pay the price is to undertake the debt of 50 billion yuan, the stock of 20 billion yuan, the price of 37.5 billion yuan in cash. The plan is well-intentioned in the current economic situation: first, to achieve market commitment in advance the Yangtze River Power in the IPO has been listed in the prospectus has such a special tip: "Three Gorges project design and installation of 26 sets of generators, planned to launch 4 units in 2003, in addition to 2006 production 2 units, From 2004 to 2009, 4 units will be put into production each year, completed in 2009. According to the State Council's approval of the restructuring report, the initiator agreement and the Articles of association, in addition to the acquisition of 4 units in 2003, the company will gradually acquire the remaining 22 generators in the Three Gorges Project, which is expected to complete all acquisitions in 2015.　　"At present, the main project of the Three Gorges has been completed at the end of 2008, and in 2009 to achieve the acquisition of the Three Gorges Project all the generator sets, the early realization of the market at the time of the pledge, and bring the following advantages: (i) further stabilize the market position of the Yangtze River Power The power of the Yangtze River can be controlled installed capacity of 8.377 million kilowatts before the transaction, after the completion of the transaction can reach 21 Million-kilowatt, about 2.5 times times before the acquisition. By then, the Yangtze River Power controllable installed capacity accounted for about 17% of China's hydropower installed capacity, in South China, east China, central China and other regions of the power market share will be significantly improved, the cityCompetitive advantage is more obvious. Its main business scale will multiply, asset scale, profitability, increase significantly, growing more clearly, the leading position of hydropower industry is also more stable.　　[Page] (ii) Optimizing corporate financial indicators and enhancing profitability the net profit of the Yangtze River Power in 2008 excluding Non-recurrent gains was 3.9 billion yuan, as at the end of 2008, net assets were 37.742 billion yuan. Assuming the June 30, 2009 completion of the transaction, the 2009 is expected to be attributable to the owner of the listed company's net profit is expected to reach about 6.3 billion yuan, net assets of 66.3 billion yuan.　　If the future of Jinsha River Power station is injected into listed companies, the Changjiang Power will maintain a steady growth trend. Note: ① assume that the future of the Jinsha River will enter the next annual amount of power ② in the future major financial indicators in accordance with the current trading structure of these indicators to calculate the increase directly led to the Yangtze River Power per share of income and net assets per share of the substantial increase. 2008 the company earnings per share of 0.42 yuan, the net assets of 3.99 yuan per share. After the reorganization is completed, earnings per share is expected to rise to 0.58 yuan in 2009, with an increase of net assets per share to about 6.05 yuan.　　Therefore, according to the reorganization plan, after the completion of this transaction, the Yangtze River Power profitability will be significantly improved. (iii) Reduction of associated transactions, to avoid competition between the Yangtze River Power and China's Three Gorges Corporation has been entrusted to manage the Three Gorges power generation assets, through this acquisition, the Three Gorges power assets and hydropower business related equity investment will all enter the listed companies, auxiliary production of specialized companies to become the Yangtze River Power wholly owned or holding subsidiaries, Will reduce the power production and operation of the associated transactions, the acquisition of the Three Gorges Project all generators, will also be effective to circumvent the China Three Gorges Corporation in the field of power production competition; Meanwhile, Changjiang Power and China's Three Gorges Corporation have made an agreement to inject the listed company into the project of the underground power station,　　This agreement will be more effective in avoiding potential competition if the first units are to be injected before they are put into power. Second, multi-debt and minority protection of the interests of small and medium-sized shareholders in the Yangtze River power of the price to undertake debt of 50 billion yuan, accounting for about half of the total transaction value, and the stock price only 20 billion yuan. It is calculated that such arrangement can play a protective role on the interests of the small shareholders of the Yangtze power. In the course of this transaction, In accordance with the transaction price of 12.89 yuan, 107.5 billion yuan of assets can be directed to issue 8.3 billion shares, the Yangtze River Power currently has a total of 9.4 billion shares, the circulation of 4.9 billion shares, if the Yangtze River power to the company issued a large number of new shares, total equity reached 17.7 billion, the company will be on the Yangtze River Power Minority shareholders will be diluted. At the same time, the increase in equity will also diluted earnings per share and net assets per share, affecting the company's outstanding performance of blue-chip image. According to the current plan, the proportion of small and medium investors will not be greatly affected. Before the transaction, the big shareholder China Three Gorges Corporation holds 5.842 billion shares of Changjiang power, accounting for 62.07%, medium and smallShareholders hold 2.57 billion shares of Yangtze River Power, accounting for more than 37.93%, after the transaction, China's Three Gorges Corporation held the Yangtze River Power shares increased to 7.394 billion shares, accounting for 67.44%, small and medium-sized shareholders accounted for a thin to 32.56%.　　In such a large-scale asset transaction, not too much dilution of the proportion of minority shareholders, fully protect the interests of small and medium shareholders. Comparison of shareholding ratio of China's Three Gorges Corporation before and after the current distribution of Changjiang power Meanwhile, China's Three Gorges Corporation's hydropower quality assets injection, also for the Yangtze River Power to undertake 50 billion of the debt provided repayment guarantee.　　The Changjiang power assets and liabilities ratio has been low, after the debt can optimize the existing capital structure, under the current low interest rate background, can give full play to the role of financial leverage, improve corporate profitability.　　Third, evade development risk, concentrate on hydropower operation another characteristic of this reorganization is to arrange some cash as the payment of the transaction, which is the wise way for the Changjiang power to dissolve the risk of developing new project. The injected assets of the overall listing do not include the Jinsha project under development and may be scheduled later. The Jinsha project includes two hydropower projects in the river Xiluodu, to the home Dam hydropower station and two planning projects Wudongde, Baihe Beach hydroelectric power station.　　The total installed capacity of the Jinsha project is equivalent to two Three Gorges hydropower station, its project quantity is huge is the previous project cannot compare. According to the current trading structure design, Changjiang electric power can concentrate on the production of hydropower, the benefits are mainly as follows: (i) Jinsha project construction scale, and its corresponding is the construction of huge risk, the transaction did not enter the Yangtze River Power, for the development of the Yangtze River power itself should be said to have won a better opportunity.　　After the reorganization of the Yangtze River Power is a high-quality power generation assets, can directly for the Yangtze River power to bring visible benefits, the Yangtze River Power can concentrate on the production, operation and sale of hydropower, not in the construction project to expend energy, so that the Yangtze River Power can travel light, wholeheartedly good China's hydropower industry leader (b) The recent financial indicators of listed companies are not affected. The Jinsha project is under construction, and it is expected that the first generator set will be ready for production in 2012 and the overall project will be completed in 2021 years.　　The construction of the project can not bring profits for the enterprise, but will reduce the return on net assets and other financial indicators. (iii) The Jinsha River Project includes a part of the Three Gorges debt, if the Jinshajiang project also entered the listed companies, will further increase the debt of listed companies, will increase the company's solvency pressure and operational risk.　　In order to optimize the power assets and liabilities structure of the Changjiang River, to leave space for the future financing of the company and to promote the development of the company, it is advantageous for the listed company to not enter the Changjiang power. (d) Although the reorganization does not involve the assets of the Jinshajiang project, the Yangtze River Power is currently the only listed platform for China's Three Gorges Corporation, or it can have good expectations. If the Jinsha River project can be injected after production, not only can avoid competition, but also for the Yangtze River power to bring an explosion of growth opportunities. The installed capacity of Jinshajiang project is twice times of the Three Gorges Project, in 2012, gradually put into production, if the future injection of listed companies, will make its operating scale and profitability continue to grow, for the promotion of enterprise value planted seeds. Note: ① assume that the future of the Jinsha project will be injected into the Yangtze River Electric Power ② The future major financial indicators in accordance with the transaction structure of the next year by then, the Yangtze River Power installed capacity and asset size would be greatly improved, the corresponding enterprise profits will also increase, net profit breakthrough billion is also imminent.　　Therefore, the Changjiang power is a good choice for long-term investment. Adhere to the scientific concept of development, to create a reasonable industrial chain, set up the new standards of the industry 16 session Plenary put forward the scientific concept of development, and summed it up as "adhere to people-oriented, set up a comprehensive, coordinated and sustainable development concept, promote economic and social and human all-round development, adhere to urban and rural development, overall planning, To co-ordinate the economic and social development, to co-ordinate the harmonious development of human and nature, to co-ordinate domestic development and opening-up requirements.　　This major asset reorganization of the Yangtze River Power, straighten out the power production, operation, sales integration of the industrial chain, with a scientific attitude to promote the company's development, and actively respond to the state to learn the use of scientific development concept of the important theoretical thinking, to achieve the guidance of the enterprise scientific development requirements and objectives. Throughout the power industry, the listed companies, regardless of hydropower, most of the large shareholder assets is far more than the listed companies, many rich unlisted quality assets still exist in the hands of various power groups. The Yangtze River Power as a leading hydropower industry, its major shareholders will be all the main business assets into the listed companies will undoubtedly set up a new standard in the power industry, that is, highlighting the main business, so that the group's main businesses market share and resources quickly to the listed companies, to minimize the transfer of benefits and related transactions　　Improve the efficiency of asset use and management efficiency, enhance the profitability of listed companies to ensure the interests of large and small shareholders. The Three Gorges hydropower station and the auxiliary specialized company asset injection, plus the Changjiang electric power itself is the hydropower industry leading enterprise, causes it already to form the hydroelectric power production, the operation, the sale industrial chain. As the only integrated platform of hydropower business in the Three Gorges Project Development Corporation, we can share the sustainable growth of hydropower resources in China in the future.　　and vertical integration will significantly reduce production costs, significantly improve profitability, directly enhance the company's financial indicators. V. The influence of the whole listing on the Changjiang electric power in general, the impact of this reorganization on the Changjiang power is mainly embodied in the following aspects: (a) to improve the core competitiveness of the Yangtze River Power assets in the Yangtze River after the overall injection of power assets, the growth of the Changjiang Electric asset scale, is conducive to the　　To enhance the capacity of large-scale hydropower production operation and marketing, it is beneficial for Changjiang electric power to enlarge the main business scale of hydropower rapidly, improve profitability and risk-resisting ability comprehensively, realize the synchronous growth of scale and performance. (b) Further standardize the company's operation the overall injection of the power generation assets of the Three Gorges Project will solve the problem of the distribution of the Three Gorges power generation assets, and help to evade China's Three GorgesHead Office in the field of water and electricity business competition, eliminate the secondary injection of continuous associated transactions; To improve the power of the Yangtze River management structure, in assets, business, personnel, finance, institutions and other aspects of independence, direct market-oriented independent operation, standard operation. (iii) To achieve coordinated development with China's Three Gorges Corporation after the Three Gorges project power generation assets into the Yangtze River Power, China's Three Gorges Corporation is mainly responsible for the Three Gorges Project management, the Three Gorges project to carry out the social commonweal function, to ensure social, economic and ecological benefits of full play; To exercise the management responsibility of the state-owned shares of the Changjiang Electric Power and other wholly-owned and holding companies; continue to accelerate the development of hydropower resources in the downstream of the Jinsha River; As a state authorized investment institution, actively participates in state-owned capital adjustment and state-owned enterprise reorganization, develops wind power and other new energy As the main business of the power market and capital markets, Changjiang Electric power fulfills the management function of the Three Gorges Project and makes the electric power production and operation better by the market mechanism. China's Three Gorges Corporation and the Yangtze River Electric power both strategic positioning and responsibility boundary will be more clear, conducive to the full play of the comprehensive benefits of the Three Gorges Project and the preservation and appreciation of State-owned assets, for both sides comprehensive, coordinated and sustainable development to lay a more solid foundation of the system