Events:
The controlling shareholders and executive directors sell their shares and introduce them to the shareholders of the central enterprises. It was announced on 24 July that the controlling shareholders and executive directors sold 125 million of their shares to China Hengtian Holdings Limited at HK $1.72 per share.
Issue a new share subscription agreement to the national industrial fund. According to the announcement on July 21, the company issued 200 million new shares to China State-owned Capital Venture Capital Fund Co., Ltd., accounting for 14.26% of the issued shares, with a subscription price of HK $1.72 and a six-month lock-up period. HK $344 million is used for research and development, capital expenditure and general working capital of the company.
Comments:
The largest state-level equity investment fund invested in Saijing. China State-owned Capital Venture Capital Fund Co., Ltd. is a state-level industrial investment fund established by China Guoxin holding Co., Ltd. as the main sponsor and controlling shareholder and approved by the State-owned assets Supervision and Administration Commission of the State Council. mainly invests in enterprise technological innovation and industrial upgrading projects. The fund was established in August 2016, with an initial size of 100 billion yuan and a total size of 200 billion yuan. It is currently the largest state-level venture capital fund in China.
Introduce shareholders of central enterprises. China Hengtian holding Co., Ltd. is a wholly owned subsidiary of China Hengtian Group, while China Hengtian Group is a wholly owned subsidiary of the central enterprise-State Machinery Corporation (China Machinery Industry Corporation).
The participation of the national team in Saijing highlights the strategic position of the company's products, and Saijing ushered in new development opportunities. We believe that Saijing's introduction of China's state-owned capital venture capital fund and Hengtian Holdings, a subsidiary of the National Machinery Group, as strategic investors has not only increased the company's capital reserves through private placement, but also increased the state-owned background for the company through the introduction of state-level investment funds and central enterprises as shareholders, and is expected to win national projects. As the first investment project in Hong Kong, the Chinese state-owned capital venture capital fund invests in Saijing, which affirms the technological strength and development prospects of Saijing's research and development, and highlights the strategic position of the company's products. We believe that Saijing will benefit: 1, financing capacity; 2, cooperation; 3, opportunities to participate in major national projects. We believe that the core competitiveness of Saijing is to have continuous R & D capability and continue to develop world-leading products. Saijing is about to usher in new development opportunities.
Investment advice: maintain the buy investment rating. Benefiting from the market outbreak of UHVDC and flexible transmission projects in China, Saijing is now ushering in a stage of rapid performance growth. On June 14, the company issued a profit announcement for 2017 interim results. With the introduction of national industrial funds and shareholders of central enterprises, we are more optimistic about the long-term development space of Saijing in the future, so we maintain its "buy" investment rating.
Risk hint: the progress of UHV and flexible transmission projects is not as expected, and the promotion of new products is not as expected.
