Agreement transfer and private placement go hand in hand, and Guosheng Energy is about to gain control.

On August 9, 2023, Qianjing Garden announced the progress of the share transfer Agreement and the change of control, and Guosheng Energy will gain control of the company. at the same time, the company announced an additional plan to raise more funds from Guosheng Energy. In view of the smooth development of the company's photovoltaic business and the further increase in the certainty of the landing of control, we maintain the company's profit forecast and estimate that the 2023-2025 net profit will be 0.51 billion yuan 0.61 billion yuan, corresponding to EPS0.08/0.09/0.12 yuan per share, and the PE of the corresponding share price will be 62.7 pm 52.4 × 41.2 times, maintaining the "buy" rating.

Agreement transfer: 8.85% of the shares will be transferred, and Guosheng Energy will become the new controlling shareholder of the company.

On August 9, 2023, Guosheng Energy (8% stake in dry King Garden before the transfer) signed a share transfer Agreement with Hui Quanfu and Yang Jing, the controlling shareholder and actual controller of dry King Gardens. It is proposed to transfer 56.8673 million shares (8.85% of the total share capital) held by Yang Jing at a price of 7.78 yuan per share. After the completion of this share transfer, Guosheng Energy will hold 108.296 million shares (16.85% of the total share capital) and become the controlling shareholder of the company. Payment arrangements: (1) within 30 days after the effective transfer agreement and announcement, Guosheng will pay the price of 242 million yuan; (2) after completing the transfer of ownership of the underlying shares and completing the re-election of the board of directors and the board of supervisors in accordance with the transitional period, Guosheng will pay the price of 200 million yuan.

Private placement: increase capital by 787 million, further stabilize the company's ownership structure and enrich working capital

Guosheng Energy plans to increase its capital by no more than 778 million (issuing 193 million shares, no more than 30 per cent of the total existing share capital) to the company to further consolidate its control and enrich its working capital. On August 9, 2023, Qianjing Garden announced an additional plan to raise no more than 787 million yuan from Guosheng Energy at a price of 4.08 yuan per share. Guosheng Energy will pay for this offering through its own funds and self-raised funds. After the completion of this additional issue, the shareholding proportion of Guosheng Energy will reach 36.04%, and the increase in the shareholding proportion of controlling shareholders is conducive to the stability of the company's ownership structure. At the same time, the additional funds raised to supplement the working capital will further enrich the company's working capital and promote the company's business development in the field of photovoltaic.

The subscription increase and Guosheng Energy exemption from issuing the offer have been examined and approved by the board of directors; it is still necessary: (1) the subscription increase and Guosheng Energy exemption from issuing the offer have been examined and approved by the shareholders' meeting; (2) the subscription increase has been examined and approved by the General meeting of Guosheng Energy; (3) it has been examined and approved by the Shanghai Stock Exchange and the CSRC has made a decision to agree to the registration.

Risk hint: the transfer of the agreement has not been completed; there are still three examination and approval procedures to be performed.