Description of the event
The company announced on May 21 that Hu Danfeng, Huatie Hengsheng, Hornet Holdings, and Huang Jianxin will transfer a total of about 275 million shares of listed companies to the Haikong Real Estate Investment Agreement at a price of 7.258 yuan/share. After the transfer is completed, Haikong Industrial Investment will hold 14.01% of the listed company's shares and become shareholders of Huatie Emergency Holdings.
Incident comments
On May 21, Hu Danfeng, Huatie Hengsheng, Hornet Holdings and Huang Jianxin signed a “Share Transfer Agreement” with Haikong Investment to transfer a total of 275 million shares of Huatie Emergency Unrestricted Tradable Shares at a price of 7.258 yuan/share, accounting for 14.01% of the total share capital of the listed company. The total price is about 2 billion yuan, and the price is paid in three installments. After the transfer, Mr. Hu Danfeng's direct shareholding ratio dropped to 9.01%, and Haikong Investment Holding Company was 14.01%, and he became the controlling shareholder. The company promised that operating income under the audited consolidated income statement for 2024-2026 shall not be less than 3.2 billion yuan, 4 billion yuan, and 5 billion yuan respectively; the net profit under the 2024-2025 consolidated income statement shall not be less than 600 million yuan and 630 million yuan respectively, and the total net profit promised for the three years from 2024 to 2026 shall not be less than 2 billion yuan. If the performance falls short of expectations, Mr. Hu Danfeng is required to make corresponding cash compensation; at the same time, the amount of accounts receivable of the company on December 31, 2023 was 35.26 billion yuan 100 million yuan. It is promised that the recovery rate will not be less than 85% as of March 31, 2027; in addition, the agreement requires the company to transfer 20% of its shares in Huatie Leasing to the outside world before the delivery date.
After this equity change was completed, the Hainan Provincial State-owned Assets Administration Commission became the actual controller of the company. The scope of business of Haikong Industrial Investment is tourism infrastructure investment and development, project investment, etc. Haikong Industrial Investment is a wholly-owned subsidiary of Hainan Holdings. The Hainan Provincial State-owned Assets Administration Commission holds 91.36% of the shares, and the Hainan Provincial Department of Finance holds 8.64% of the shares.
The impact of this equity change: 1. This is a premium transfer, with a sale price of 7.258 yuan, the company's stock price was 6.54 yuan, with a premium of about 11%; 2. The state-owned holding background will enhance the company's creditworthiness. Hainan Holdings will vigorously promote the financing of listed companies to help the company obtain sustainable and stable financing sources and lower financing costs; 3. Hainan Holdings will give full play to the institutional and policy advantages of the Hainan Free Trade Port to coordinate the resources of its airport sector and regional comprehensive development sector to effectively enhance the company's profit margin profit Capabilities; 4. Hainan Holdings will focus on supporting the comprehensive development of the company's innovative leasing business and asset-light cooperation, promoting the implementation of the company's asset-light and multi-category strategies, and further enhancing the company's sustainable management capacity and profitability.
The aerial work platform rental boom remains the same. The company's main business is expected to continue to grow rapidly, and the implementation of various types of rental equipment will further increase the company's profits. In the future, with the advancement of its own procurement and the implementation of asset-light assets, the scale of the company's main business is expected to continue to grow; based on the marketing network established by the aerial work platform, the company will further explore multiple categories of operations, and use forklifts as one of the next key rental categories to explore, so it is recommended to pay attention. At the same time, the gradual implementation of innovative leasing businesses such as computing power and low altitude is also expected to increase the company's profits. It is expected to achieve performance of 10.2, 12.6, and 1.51 billion in 2024-2026, corresponding to current valuations of 12.29, 9.93, and 8.29 times. Combined with the restoration of current manufacturing expectations, procyclical sentiment is boosted by superimposed real estate policies. The company has upward flexibility and maintains a “buy” rating.
Risk warning
1. Asset light falls short of expectations;
2. High leverage risk.