On October 27th, Finline News (Reporter Zhang Liangde) reported that Huawei Hongmong concept stock Shijiazhuang Changshan Beiming (000158.SZ) plans to conduct asset swaps with other companies under its parent company Changshan Group, divesting the perennially loss-making textile business, and acquiring new energy and smart city businesses with synergy with the software business. Changshan Group will pay the listed company a transaction difference exceeding 1.5 billion yuan in the later period.

Shijiazhuang Changshan Beiming disclosed a notice tonight, to focus on the core software business and enhance the company's core competitiveness. The company plans to sell 100% equity of its wholly-owned subsidiary Shijiazhuang Changshan Hengxin Textile Co., Ltd. to Changshan Group, and acquire 100% equity of Shijiazhuang Energy Investment and Development Co., Ltd., held by Shijiazhuang Changshan Textile Group Co., Ltd. and 80% equity of Shijiazhuang Smart Industry Co., Ltd., held by Silicon Motion Technology.

The announcement states that the company's purpose in this asset swap is to further focus on the core software business, enhance the company's core competitiveness, introduce new energy and smart city businesses that have synergy with the software business, and divest traditional textile businesses. The new energy and smart city businesses introduced in this swap can form a synergistic effect with the software business, creating linkage effects such as "smart parks," "smart cities," and "smart energy."

Previously, on April 29th of this year, Shijiazhuang Changshan Beiming disclosed an asset swap plan involving the proposed target assets of two subsidiaries, including 100% equity of Shijiazhuang Energy Investment Development Co., Ltd. and 80% equity of Shijiazhuang Smart Industry Co., Ltd., held by Silicon Motion Technology. However, in the latest disclosed plan, these two companies are not included. The targets of this proposed swap are Energy Investment and Smart Industry, excluding the previous two companies.

Among them, the main business of Energy Investment includes photovoltaic, wind power generation, and charging pile operations, industrial park investments and operations, property leasing, and property management services. Currently, there are a total of 5 distributed photovoltaic projects with a total installed capacity of nearly 10 megawatts, which have been put into operation successively. The charging pile business currently has only one project, the Shijiazhuang Jiefang Square Charging Station project developed in cooperation with Shijiazhuang Special Electricity New Energy Co., Ltd., and Shijiazhuang Real Estate Group Co., Ltd. The project income comes from charging service fees for new energy vehicle charging piles. Wind power generation and industrial park investment and operation are still in the construction phase and have not generated income. The company's revenue in 2023 was 11.4174 million yuan, with a loss of 5.999 million yuan. In the period from January to April of this year, the revenue was 4.2399 million yuan, with a loss of 3.4961 million yuan, and the net assets attributable to the parent company were 0.345 billion yuan.

The Smart Industry mainly provides solutions, hardware products, and professional services for clients in fields such as government affairs and environmental protection. The company's revenue in 2023 was 27.8989 million yuan, with a net loss attributable to the parent company of 18.019 million yuan. From January to April this year, the revenue was 19.9659 million yuan, with a net loss attributable to the parent company of 6.8468 million yuan, and the net assets attributable to the parent company were 0.198 billion yuan.

The two companies planned to be acquired were established not long ago and are currently in a loss-making state. However, Changshan Beiming stated that these two companies have synergy with its subsidiary Beiming Software. According to the company's announcement, these two companies have a stronger demand for Beiming Software.

For energy investment companies, listed companies indicated that they can build green and efficient zero-carbon data centers through energy investment in electrical utilities, expand the relevant business of Shijiazhuang Changshan Beiming Technology's smart park, while the existing software business can also help with the operation and maintenance of energy investment projects, achieving complementary advantages. For smart industry companies, Shijiazhuang Changshan Beiming Technology can provide more advanced operation and maintenance experience for the government cloud of smart industry companies, improving production efficiency; smart industry companies can use the unified operation and maintenance platform of Changshan Beiming data center to save costs; at the same time, the project experience of energy saving and emission reduction monitoring and management platform for smart industry can be combined with energy company control systems and comprehensive energy management systems of other subsidiaries of Changshan Beiming.

After evaluation, the assessed value of the total shareholders' equity of the energy investment and 80% of the smart industry is 0.619 billion yuan. Among them, the assessed value of the total shareholders' equity of 100% equity of energy investment is 0.422 billion yuan; the assessed value of the total shareholders' equity of 80% equity of the smart industry is 0.197 billion yuan.

The property divested by Shijiazhuang Changshan Beiming is the company's textile business, with a revenue of 1.994 billion yuan in 2023, a net loss attributable to the parent of -0.173 billion yuan, a revenue of 0.471 billion yuan from January to April this year, a net loss attributable to the parent of -0.068 billion yuan, net assets attributable to the parent of 2.054 billion yuan, and an assessed shareholder equity value of 2.372 billion yuan.

Taking into account the impact of the transitional period's profit and loss, the proposed transaction price for the divested assets is 2.152 billion yuan, and the proposed transaction price for the transferred-in assets is 0.607 billion yuan. Due to the lower value of the transferred-in assets compared to the divested assets, Changshan Group will make up the difference in two phases in cash. The first phase will make up the difference between 30% of the total consideration for the divested assets and the difference with the consideration for the transferred-in assets in cash, amounting to RMB 38.1595 million; the remaining unpaid difference consideration of 1.506 billion yuan principal and interest will be paid within 1 year.