Cryogenic Cooling Co., Ltd. issued an announcement on increasing its capital participation in Xuzhou Minghuan Energy Co., Ltd. and foreign investment. The main contents are as follows:
1. Chengdu Cryogenic Liquefaction Equipment Co., Ltd. plans to sign the “Capital Increase Agreement for Xuzhou Minghuan Energy Co., Ltd.” with Xuzhou Minghuan Energy Co., Ltd. and all of its shareholders. It is agreed that the company or the designated third party participating in the investment, Xuzhou Minghuan Energy Co., Ltd. will increase its capital by RMB 20,000, of which 3,080,000 yuan is included in the registered capital of the bidding company, and part of the capital increase premium will be included in the capital reserve fund of the target company. After this limited capital increase is completed, the company or the designated third party participating in the capital increase will contribute to Xuzhou Minghuan Energy Company's investment ratio to Xuzhou Minghuan Energy Company 23.55%
2. According to the “Articles of Association” and “Shenzhen Stock Exchange Stock Listing Rules”, the authority to approve matters signed in this agreement falls within the board's authority for foreign investment, and there is no need for approval by the shareholders' meeting. The signing of this agreement by the company does not constitute a related transaction, nor does it constitute a major asset restructuring as stipulated in the “Administrative Measures on Major Asset Restructurings of Listed Companies”.
3. Xuzhou Minghuan Energy Co., Ltd., the company or the designated third party participating in the investment, will increase the capital to the target company by RMB 20,000. Of this, 3,080,000 yuan will be included in the registered capital of the target company, and part of the capital increase premium will be included in the target company's capital reserve fund. After this capital increase was completed, the investment ratio of the company or the designated third party participating in the investment in Xuzhou Minghuan Energy Co., Ltd. was 23.55%. All of this capital increase is from own funds.
reviews
The invested company mainly uses hydrogen fuel and fuel cells as the research direction and has obtained a number of patents
The core team of Xuzhou Minghuan Energy Co., Ltd. has many years of background and experience in the hydrogen fuel and fuel cell industry, and has independent, complete and mature fuel cell technology development capabilities. From system design and calculation to component selection, from control system development to implementation of control strategies, from product application to market requirements, the team has accumulated rich practical experience. The company has successively developed restructured hydrogen production systems for natural gas, methane, methanol, gasoline, diesel, biodiesel and biopetroleum, designed and manufactured hydrogen energy-related equipment, and carried out demonstration projects such as fuel cell cogeneration and fuel cell backup power in Shanghai, Liaoning, Tianjin, Zhejiang, Guangdong and other places.
The company has rich experience in the development, manufacture and system integration of fuel cells and reformed hydrogen production systems. It has applied for 32 intellectual property rights for core related technologies, including 9 invention patents, and has authorized 22 patents so far. The company's main products include: methanol reformed hydrogen production systems, methanol reformed fuel cell backup power systems (product specifications: 3 kilowatts and 5 kilowatts), high temperature proton membrane fuel cells (product specifications are 2 kilowatts and 5 kilowatts), natural gas/diesel reformed solid oxide fuel cell cogeneration systems (product specifications: 1 kilowatt), natural gas reformed hydrogen production systems (product specifications: 10 kilowatts and 25 kilowatts), natural gas cogeneration fuel cell systems (product specifications: 1 kilowatt), fuel cell testing devices, etc.
The capital of Xuzhou Minghuan's capital increase is intended to be used to build product production lines and supplement working capital.
The main application and promotion direction of hydrogen fuel cells by invested companies is backup power for 5G communication base stations
The natural gas and methanol reforming hydrogen solid oxide (SOFC) fuel cell cogeneration system recently developed by Xuzhou Minghuan has been running uninterrupted for more than 1000 hours at customer companies, and the system is running stably. Solid oxide fuel cell systems for reforming hydrogen are difficult to develop, and the technical threshold is high. Currently, there are no industrial products in China. Foreign products such as these have provided new energy services with an installed capacity of more than 30 GW for big data centers, banks, hospitals, schools and consumer entertainment venues. The system has a power generation efficiency of 60% and a total thermoelectric efficiency of over 90%. Using a solid oxide (SOFC) fuel cell cogeneration system to provide distributed energy has the characteristics of high power generation efficiency, zero emissions, and a wide range of applications. In line with the national clean energy industry policy, the solid oxide (SOFC) fuel cell cogeneration system is expected to become one of the mainstream products providing clean energy services for medium to large distributed power generation, data centers, commercial buildings, medical care and special fields.
The company's main business direction is currently promoting and selling hydrogen fuel cells as backup power for 5G communication base stations. The product has been tested at various base stations in Liaoning and Jiangsu, and has experienced different environments (high temperature, low temperature, humidity and dryness). The requirements for stable and reliable power for communication base stations are well known, especially superbase stations. Currently, backup power for this type of base station is mainly provided by a combination of batteries and diesel engines, and annual maintenance costs are high. Hydrogen fuel cells have been highly recognized by base station operators for their stable and reliable, all-weather use, zero pollution, and relatively low maintenance costs, and have good economic and social benefits.
After market research, Xuzhou Minghuan has adopted the 5 kilowatt methanol fuel cell base station backup power system as a key product currently being developed and promoted.
The company continues to push for the completion of the hydrogen energy utilization industry, and continues to promote the layout of the hydrogen energy industry. The company's capital increase for Xuzhou Minghuan Energy Co., Ltd. is in line with the company's hydrogen energy development strategy. Through this capital increase, the company can collaborate with target companies in the field of hydrogen fuel cells to further improve the layout of the hydrogen energy industry chain on the basis of the company's current hydrogen production, hydrogen liquefaction, hydrogen storage, transportation and refueling industry chains, and nurture the company's new profit growth points.
Profit forecasting
We maintain the company's profit forecast. It is estimated that the company will achieve operating income of 520, 623 and 747 million yuan from 2020 to 2022, and net profit attributable to the parent company of 0.30, 0.38 and 45 million yuan. The company's latest total share capital is 125 million shares, corresponding to EPS of 0.24, 0.30 and 0.36 yuan. On September 21, 2020, the latest stock price was 23.44 yuan, corresponding to a market capitalization of 2.9 billion yuan. In 2020-2022, PE was about 96, 77 and 65 times. The company's core LNG equipment business in 2019 is likely to be a cyclical inflection point. In the future, it will return to a booming path. Considering the company's layout in hydrogen energy utilization, we will maintain the company's “increase” rating.
Risk warning: The recovery in demand for LNG equipment fell short of expectations; construction of hydrogen energy infrastructure fell short of expectations.