Although Zhangze Electric Power is still "* ST", but the fundamentals have changed greatly, it is suggested that investors should pay more attention to it. We believe that after the actual controller of the company has been changed to Shanxi SASAC, it has become an important platform for Shanxi Province to develop "coal-power joint venture". It has a broader space for development in the future and is expected to become a large market capitalization company.
In 2013, Zhangze Electric Power will have the following major advantages: (1) the change of shareholding, straightening out the management relationship, and opening up the space for development; (2) the major asset restructuring has been approved, high-quality assets will be injected, and the scale will be expanded at the same time. Profitability has been greatly improved; (3) with the support of the new controlling shareholder Tong Coal Group, the profitability of the original power plant will be greatly improved. (4) with the strong support of the Shanxi provincial government, it is a foregone conclusion to turn losses into profits in 2012, and it is only a matter of time before the cap is taken off.
First, under the two-pronged approach of equity transfer and directional additional issuance, the actual controller was changed to Shanxi SASAC on January 5, 2013, and the company issued an announcement. China Power Investment Group and Shanxi International Electric Power respectively transferred 185 million shares and 11413 million shares of the company to Shanxi SASAC free of charge, and have completed the registration procedures for transfer of ownership. At the same time, the company has issued 680 million shares to Tongshan Coal Group to purchase related assets, and major asset restructuring issues of no more than 250 million new shares to raise matching funds have been approved by the CSRC.
According to the announcement issued by the company on September 12, 2012, for the 299.13 million shares freely transferred to Shanxi SASAC, Shanxi SASAC will fully entrust Tong Coal Group to manage and inject into Tong Coal Group in the form of increasing capital within one year.
In this way, after the completion of equity transfer and additional issuance, the total share capital of Zhangze Electric Power will be changed to about 2.25 billion shares, and the same Coal Group holds 980 million shares, accounting for about 43.6% of the total share capital, becoming the largest shareholder of Zhangze Electric Power. Shanxi SASAC has become the actual controller of Zhangze Electric Power.
We believe that if the SASAC of Shanxi Province becomes the actual controller of the company, the management of the company will be smoother and the future development space will be broader. The company suffered huge losses in 2008, 2010 and 2011, which led to being "* ST", mainly due to the sharp rise in coal prices in Shanxi Province, the lag of electricity price increases, and the inability of the company's original major shareholder, China Power Investment Group, to provide effective support. After the change of the actual controller, the company has become a "brotherly relationship" with Shanxi coal enterprises, which can get more effective support from the controlling shareholder Tong Coal Group and other Shanxi coal enterprises, and the positioning of the company will also change fundamentally.
Second, targeted additional issuance and acquisition of high-quality assets, doubling in size and substantial improvement in profitability the company issued a notice on November 30, 2012: "the major asset restructuring of the company's issuance of shares to purchase assets and the raising of supporting funds and related transactions have been examined and approved by the 32nd working meeting of the merger and reorganization Review Committee of listed companies of the China Securities Regulatory Commission in 2012 and approved unconditionally." On January 4, 2013, the company announced that on December 31, 2012, the company received the approval of Shanxi Zhangze Electric Power Co., Ltd. to issue shares to Datong Coal Mine Group Co., Ltd. approval to purchase assets and raise matching funds.
After the acquisition, the total installed capacity of the company will reach 6.65 million kilowatts, and the installed scale will double. These power plants are located at the mouth of the pit, with strong coal security capacity, high utilization hours and outstanding profitability, which will greatly improve the profitability of the company.
With the support of Shanxi State-owned assets Supervision and Administration Commission and Tong Coal Group, after the company has doubled in size, there is still a lot of room for future development. Considering the electric power projects that the company is currently under construction, to be built and has made "road strips", it is estimated that by the end of the "12th five-year Plan", the total installed capacity of the company will reach 120 to 15 million kilowatts, and the installed capacity will double again, accounting for 1G of Shanxi thermal power installation, realizing great-leap-forward development. Third, with the support of major shareholders, a substantial increase in the profits of the original power plant can be expected according to the "report on Major Asset restructuring and raising matching funds and related transactions (draft) issued by the company on July 27, 2012." the company expects to acquire assets with a total profit of 720 million yuan in 2013 and a net profit of 420 million yuan. After the completion of the acquisition, the total profit of all assets attributable to pro forma profits is 440 million yuan, and the net profit is 160 million yuan.
Accordingly, the company assumes that the total profit of the original assets in 2013 is a loss of 280 million yuan, and the attributable net profit is a loss of 260 million yuan.
We judge: after the completion of the reorganization, the company is expected to get the preferential coal price of Shanxi Coal Company, because the original installed scale of the company is similar to that of the acquisition, according to the same profitability, the net profit of the company's original assets will also be about 420 million yuan, rather than a loss of 260 million yuan. In this way, after the completion of the restructuring of the company, the net profit in 2013 is expected to reach 840 million yuan.
Fourth, the company will succeed in turning losses into profits. Since the third quarter of 2012, through the sale of inefficient assets and government support, the company has obtained a large amount of investment income and financial subsidies, helping the company to successfully turn losses into profits in 2012. The relevant investment income and financial subsidies are shown in Table 2.
We judge: due to the sharp decline in national coal prices in 2012, especially since the fourth quarter of 2012, Shanxi Kengkou coal prices have dropped significantly compared with the first half of the year, and the company's main power generation business has made a profit in the second half of the year. The loss in the first half of the year can be made up for by subsidies and equity investment income, so it is inevitable that the company can make a profit for the whole year of 2012. 5. Nirvana Rebirth and Building a High-quality Enterprise for the Integration of Coal and Power according to the 12th five-year Plan of Shanxi Province, the Shanxi provincial government put forward that in order to achieve transformational development and leapfrog development, an important aspect is to give full play to the advantages of coal resources. increase the proportion of local conversion of coal, expand the installed scale, and further improve the level of Shanxi power transmission, which will not only promote the innovative development of Shanxi as an energy base. It also strengthens the ability to provide energy services for national construction, and realizes the leap from a major province of electric power to a strong province of electric power.
During the 12th five-year Plan period, the Shanxi provincial government plans to further strengthen the construction of power points and power grids, and will further vigorously implement the energy development policy of "coal transmission and transmission at the same time", while continuing to strengthen the construction of coal bases, we will increase the construction of large-scale Kengkou power plants and power sources such as coal gangue and coal washing. This will enable the installed coal power capacity of the three major coal bases in northern, central and eastern Shanxi to reach more than 50% of the province's total installed capacity, build Shanxi into an important electric energy base in the country, and make new contributions to ensuring the national energy supply and national energy security.
With the active support of the Energy Bureau of the National Development and Reform Commission, this major asset restructuring of the company is a demonstration project to realize the joint reorganization of coal and power enterprises in Shanxi and to create the integration of coal and power in Shanxi. After the completion of this restructuring, Tong Coal Group will make full use of its own resource advantages with the support of the Shanxi provincial government and strive to transform Zhangze Electric Power into a high-quality enterprise with the integration of coal and power.
6. Be optimistic about the company's long-term development and upgrade to "highly recommended" rating according to our forecast in the third part of this article, if the company's transformation is successfully completed, the 2013 net profit is expected to reach 840 million yuan (far exceeding the exam profit forecast of 160 million yuan), corresponding to the IPO earnings per share of 0.35 to 0.4 yuan, according to about 15 times the PE, the target price is 50.6 yuan.
We are optimistic about the long-term development of the company and believe that the company is expected to become a leader in local power companies in the future. over time, it will be able to grow into a company with a large market capitalization, upgrade its rating to "highly recommended", and recommend buying and holding it for a long time.
Seventh, the risk indicates that the demand for electricity is low, the coal price has rebounded sharply, and there is a risk of shutting down small thermal power units.
