Event: the company announced that Huaxi can give up the 51 million yuan capital contribution right agreed in accordance with the articles of association of Yulin Chuaneng Huaxi, and the abandoned capital contribution right shall be subscribed by Huaxi Energy. Huaxi Energy has increased its capital by 51 million yuan in cash. After the completion of this capital increase, the registered capital of Yulin Chuaneng Huaxi remains unchanged, and Yulin Chuaneng Huaxi has become a wholly-owned subsidiary of Huaxi Energy.
Main points of investment:
Yulin Chuaneng Huaxi is a project company for Yulin waste power generation, and this capital increase is conducive to the profit contribution of the project to the company. Yulin Chuaneng Huaxi is a joint venture between Yulin Chuaneng Huaxi Biomass Energy Development Co., Ltd. and Sichuan Neng Huaxi Biomass Energy Development Co., Ltd., according to the articles of association of Yulin Chuaneng Huaxi Environmental Protection Power Generation Co., Ltd., the registered capital of Yulin Chuaneng Huaxi is 100 million yuan, of which Huaxi Energy subscribes 49 million yuan and can invest Huaxi 51 million yuan. In view of the fact that Sichuan Neng Huaxi Biomass Energy Development Co., Ltd. has decided to give up 51% of the investment rights to Yulin Chuaneng Huaxi, in order to promote the smooth progress of the investment construction of the Yulin waste power generation BOT project, after friendly negotiation among the parties concerned, the 51 million yuan that can be invested in Huaxi will be subscribed by Huaxi Energy. After the completion of this capital increase, Yulin Chuaneng Huaxi will become a wholly owned subsidiary of Huaxi Energy. The planned construction scale of the Yulin waste incineration BOT power generation project deals with 1200 tons of waste per day. After the project is completed and operated, it is expected to produce good income and stable cash flow. At present, the company's own waste power generation project of 4400 tons per day, coupled with Bohai Xinneng project, has a total treatment capacity of 11550 tons per day, which is in the forefront of waste incineration power generation in China. This capital increase will help to promote the continuation of the project construction, promote the project to be completed and put into operation as soon as possible, strengthen the centralized control over project investment, construction and operation, and improve the overall efficiency; in the future, after the project enters the project construction and operation period, it will increase the profit contribution to the company and have a positive effect on the company's performance growth.
Continue to maintain highly recommended ratings. We estimate that the company's 16 -, 17-and 18-year EPS (including Hengli Shengtai investment income) are 0.32 yuan, 0.55 yuan and 0.8 yuan respectively. In the future, the company will gradually enter the fast track of performance growth, which is worthy of continuous tracking, and we continue to maintain a "highly recommended" rating.
Risk hint: the risk that the project progress is not as expected and the order quantity is not as expected.
