Event: Mindong Electric Power issued a non-public offering announcement. The company intends to issue no more than 90909090 shares to two specific targets, and the total amount of funds raised does not exceed 700 million yuan for investment in Xiapu floating Eagle Island wind farm project and supplementary liquidity.
Comments:
Private placement to raise funds to vigorously expand the core business. The total amount of funds raised by the company does not exceed 700 million yuan, of which the controlling shareholder Ningde State-owned assets Investment (accounting for 53.21% of the company's total share capital) intends to subscribe for 19480519 shares with 150 million yuan in cash and the subscription price is 7.7 yuan per share. Fujian Investment Group plans to subscribe for 71428571 shares with 550 million yuan in cash. The company's main business is the development of clean energy, new energy and other fields, power generation business is the company's core business, this issue to raise funds for investment in Xiapu floating Eagle Island wind farm project and supplementary liquidity, is the continuation of the company's existing main business. The company belongs to the power industry is a capital-intensive industry, the scale of capital expenditure is large, the company is vigorously developing hydropower, wind power and other renewable clean energy industry, this non-public offering is conducive to the gradual increase of the company's assets, better promote the steady and rapid development of the company's main business.
Keep pace with the development of the 13th five-year Plan and consolidate the development of the main electric power industry. The 13th five-year Plan period is an important period for the large-scale development of new energy in China. The development pace of clean energy and energy conservation and emission reduction in China is obviously accelerated. The construction of large-scale hydropower bases is the focus of hydropower development in China during the 13th five-year Plan period. In recent years, the company's Ningde wind power resources project has made good progress. By the end of 15th, the company's wind power generation was 90400 kilowatts, accounting for 21.01% of the company's installed capacity. The construction scale of the Xiapu floating Eagle Island wind farm project is 48MW, which mainly includes 24 2MW wind turbines and one 110KV boost substation. According to the grid electricity price of 0.5214 yuan / kWh (including tax 0.61 yuan / kWh) excluding VAT, it is estimated that the average annual sales income of power generation (excluding tax) is about 7258. 810000 yuan, with an average annual net profit of about 31.4423 million yuan. Calculated according to the 20-year production period, the internal rate of return on after-tax investment is expected to be 9.05%, and the internal rate of return on its own capital is about 9.84%.
Therefore, we believe that after the funds raised are in place, the development of the company's main power industry will be further strengthened, and the strong financial strength will maintain the company's competitive position in the power industry. We believe that the participation of the company's controlling shareholders in subscribing for shares reflects their confidence in the future development of listed companies, and the commissioning of wind farm projects will help to strengthen the company's core business and increase the proportion of new energy power generation. enhance the company's profitability and core competitiveness. After the completion of this issue, it is expected to increase the company's cash inflow, and the supplementary liquidity will help to reduce the company's asset-liability ratio, enhance the financial anti-risk ability, and make the company's main business continue to develop steadily and healthily.
Profit forecast and rating: considering the new opportunities brought by the 13th five-year Plan to the company's main hydropower industry, we are optimistic about the company's investment and prospects in basic and resource industries. however, the company's non-public offering of shares still needs to be approved by the relevant competent departments such as the State-owned assets Supervision and Administration Commission of the Fujian Provincial people's Government and China Securities Regulatory Commission, and the project has not yet started. We do not consider the impact of this IPO on the company for the time being. It is estimated that the company's EPS for 16-18 years will be 0.08,0.09 and 0.12 yuan respectively, maintaining the "overweight" rating.
Risk factors: a sharp drop in precipitation and a reduction in hydropower generation; a reduction in electricity prices; lower-than-expected real estate sales; and a lower-than-expected pace of mining consolidation.