The incident company disclosed a major asset restructuring plan: the company plans to replace #5、 #6机组和其他资产及负债与公司控股股东投资集团旗下的鸭电公司55% of its shares in Jiaozuo Power Plant and 100% of Tianyi Company's shares, and also issue targeted additional shares to the investment group to pay part of the replacement difference. The investment group subscribed to 205.23 million A-shares in this non-public offering based on the partial difference between the assets to be placed by Yuneng Holdings and the assets to be placed by Yuneng Holdings (preliminary estimate is about 903 million yuan). The issue price was determined at 4.40 yuan/share. A brief review of the asset price of Nanyang Yahekou Power Generation Co., Ltd. compared to the 2×350MW coal-fired generator set of the first phase of the Nanyang Yahekou Power Generation Co., Ltd. project. It is a national “Ninth Five-Year” key construction project using mixed loans from the Spanish government. Construction began in December 1994. The main equipment was supplied by the Spanish INI Foundation. The first phase of the project has a total investment of RMB 5.192 billion, of which foreign capital is US$371.8 billion and domestic capital is RMB 1.912 billion. The two units began commercial operation on June 26, 1999 and November 1, 1998, respectively. Yahekou Power Generation Company lost 384.15 million yuan in 2008 in net profit, 80.74 million yuan in 2007, and 10.88 million yuan in 2006. Since Yaden's total shareholders' equity is estimated at 10 million yuan, liabilities are 1432.92 million yuan, and total assets are 2432.92 million yuan. Under the current power environment, Yahekou Power Generation Company has been in operation for 10 years, and the asset price exceeds 15 million yuan. We think it is expensive. The 2×600MW supercritical coal-fired power generation project built by Tianyi Company, which has excellent assets of Nanyang Tianyi Power Generation Co., Ltd., is a key construction project of the “11th Five-Year Plan” in Henan Province, and is the second phase of the Yaden Company. Construction of the project began on March 26, 2006, with a total investment of about 4.29 billion yuan. Unit #3 and Unit #4 were put into commercial operation on January 8, 2008 and May 15, 2008, respectively. In 2008, Tianyi Company generated 550,9163 kilowatt-hours of electricity, 516,5862 kilowatt-hours of feed-in electricity, and a feed-in price of 288.32 yuan/kilowatt-hour (excluding tax), achieving electricity sales revenue of 148.943 million yuan. Tianyi lost 427.1 million yuan in net profit in 2008. Tianyi's total shareholders' equity is estimated at 81 million yuan, liabilities are 4344.99 million yuan, and total assets are 515.4.99 million yuan. In the current power environment, due to the low energy consumption and high efficiency of 600 MW supercritical coal, the asset price exceeds 50 million yuan, we think it is reasonable. The Jiaozuo Power Plant Phase III asset coal consumption project broke ground on December 20, 1989. Unit 5 was put into commercial operation on October 12, 1991, and Unit 6 was put into commercial operation on June 9, 1992. Units 5 and 6 are designed and operated for 30 years. Currently, Unit 5 has been in operation for 17 years, and Unit 6 has been in operation for 16 years. The standard coal consumption for power supply in the original design of the unit was 391 g/kwh. #5、6 Units 5 and 6 were overhauled 5 times each, and the flow section and control system modifications were carried out in 2000, 2001, and 2004, respectively. After technical improvements, the power generation capacity of the two units reached 220 MW each. Currently, the standard coal consumption for power supply to the unit is 378 g/kwh. As of December 31, 2008, the original book assets of the two units were $1,178 billion and the net book asset value was $388 million; the proposed fixed assets and net book assets of the projects under construction were $439 million and $09 million respectively, for a total of $448 million. Asset replacement cannot reverse the standard coal consumption of Tianyi Company and Yaden Company to be injected into assets of about 333 grams/kilowatt-hour, which is at least 40 grams/kilowatt-hour difference from the proposed asset #5、 #6 unit. If according to Yaden Company and Tianyi's 2008 power generation capacity of 9.088 billion kilowatt-hours, the standard coal price per ton of power generation is estimated to be 785.12 yuan/ton for power generation, which is 785.12 yuan/ton. However, since domestic electricity prices are controlled by the government, and coal prices are set by the market, coal prices have continued to rise since 2002. In particular, after 2007, the rate of increase accelerated, and the thermal power industry has experienced losses throughout the industry. Although the National Development and Reform Commission raised feed-in tariffs twice in June and August 2008 (Yuneng Holdings received a cumulative increase of 4.5 cents/kilowatt-hour), it was still unable to offset losses caused by rising coal prices. Therefore, if the restructuring is successfully completed, the installed capacity of the owned equity will increase to 2092.5 MW, and the standard coal consumption and wage costs for electricity supply will also be significantly reduced. However, under current electricity and coal price conditions, the two companies that took in total lost 811 million yuan in 2008, and it is still difficult to make a profit. Whether they can be profitable in the future depends on the time and magnitude of the electricity price increase again and the future price of electricity and coal. After the restructuring is completed, Yuneng Holdings will have a total installed capacity of 3025 MW, a controlled installed capacity of 2,900 MW, and an equity installed capacity of 2092.5 MW. Compared with before the restructuring, total installed capacity, controlled installed capacity and equity installed capacity increased by 93.29%, 101.39%, and 120.84% respectively, and the installed capacity increased significantly. In addition, Yaden's project used foreign exchange loans to introduce complete equipment construction. Due to the appreciation of the RMB exchange rate against the US dollar, the exchange income in 2007 was 50.75 million yuan, and the exchange income in 2008 was 35.24 million yuan. Fluctuations in the exchange rate of RMB against the US dollar will have a certain impact on the company's profits.