Haiyue Energy purchased kaolin assets at a premium of nearly 600 times, and the controlling shareholder may enjoy 1.3 billion yuan in cash

Per reporter: Zeng Jian Per editor: Zhang Haini

On the evening of April 13, Haiyue Energy (600387, SH) disclosed the asset acquisition, and the company intends to spend about 1.312 billion yuan to acquire 100% of the equity of Shaanxi Northwest Nai Energy Co., Ltd. (hereinafter referred to as Northwest Nai Energy). The transaction price is nearly 600 times higher than the underlying net asset premium.

The "Daily Economic News" reporter noted that Haiyue Energy's controlling shareholder Tongchuan Huinengxin Energy Co., Ltd. (hereinafter referred to as Tongchuan Huinengxin) is undoubtedly the biggest winner of this transaction, and it got all the equity of Northwest Nai Energy free of charge in February, and now it has sold a high price of 1.3 billion yuan as soon as it changes hands. Northwest Energy is mainly engaged in kaolin mining and deep processing business, but it is still in a state of preparation. Judging from the announcement, Northwest Energy still needs to invest huge amounts of money in the construction of projects for several years.

<h2>Proposed purchase of kaolin assets</h2>

According to the announcement of Haiyue Energy, the company intends to acquire 100% of the equity of Northwest Nai Energy held by Tongchuan Huinengxin by paying cash. Taking March 31 as the valuation base date, the appraisal value of the 100% equity of Northwest Energy is 1.366 billion yuan. As of March 31, the total assets and net assets of Northwest Resistant Energy were 2.1838 million yuan. The aforementioned appraisal value increased by RMB1.364 billion over the Company's net assets, representing an appreciation rate of 62460.69%.

According to the above appraisal value, the parties to the transaction determined that the transaction price of 100% equity of Northwest Energy under the transaction was 1.312 billion yuan, which was 599.58 times higher than the appreciation rate of the company's net assets. According to the agreement, within 5 working days from the effective date of the equity acquisition agreement, the listed company will pay the agreed transaction price to the controlling shareholder in one lump sum. As of September 30, 2020, haiyue energy's monetary fund balance was 1.595 billion yuan, and the merger will consume a lot of the company's funds.

Selling assets at such a high premium rate, Tongchuan Huinengxin undoubtedly made a lot of money, not to mention that it did almost no cost of buying and selling. The announcement disclosed that Northwest Refractory Energy was established in July 2020 and was funded by Shaanxi Northwest Refractory Co., Ltd. (hereinafter referred to as Northwest Refractory), with a registered capital of 100 million yuan, but no actual capital was contributed. In February this year, with the approval of the State-owned Assets Supervision and Administration Commission of Tongchuan Municipal People's Government, it was agreed that Northwest Refractory Materials would transfer 100% of the equity held by Northwest Refractory Energy to Tongchuan Huinengxin without compensation. Based on the analysis of the asset situation of Northwest Resistant Energy, Tongchuan Huinengxin has not actually contributed funds after taking over.

Why is Northwest Energy so valuable? According to the announcement, the company is mainly engaged in kaolin mining and deep processing of chen furnace clay ore, but the company is still in a state of preparation and has no related physical assets. It is reported that Northwest Resistant Energy has the mining rights of the Chen Furnace Clay Mine located in Xiaobei Fort, Yaozhou District, Tongchuan City, Shaanxi Province. As of March this year, the resources held within the scope of the Chen Lu Clay Mine Mining Certificate were 3.71 million tons, and the mining type was kaolin.

<h2>It is also necessary to invest heavily in supporting the construction of the target project </h2>

In this transaction, the two parties signed the "Profit Forecast Compensation Agreement". The profit compensation period promised by Tongchuan Huinengxin is from 2024 to 2026, and the net profit attributable to the mother after deducting non-deductions of the consolidated caliber of Northwest Energy is 110 million yuan, 120 million yuan and 150 million yuan respectively (of which the cumulative calculation in 2024 is 2021 to 2023).

Since its establishment, Northwest Energy has not been actually operated and has no operating data. Judging from the announcement, Northwest Energy will carry out project construction in the next few years. By 2024, the project will start production, and the project will reach full production in 2026. The total investment of the project is 1.134 billion yuan, and the source of funds is "self-financing and borrowing of the construction unit, of which the self-financing part of the construction unit is completed through the form of registered capital paid by shareholders and capital increase, and the other part is completed by borrowing". That is to say, after Haiyue Energy takes over Northwest Energy, the listed company may continue to invest a lot of money to support the project construction of the target company.

The "Daily Economic News" reporter noted that the production scale approved by the existing mining license of Northwest Resistant Energy is 150,000 tons / year. The kaolin original mineral energy of Longgao Co., Ltd. (605086, SH), an A-share listed company, is about 600,000 tons per year, and its capacity utilization rate from 2017 to 2019 is around 80%. At the same time, the company also has concentrates, comprehensive utilization products and other production capacity. From 2017 to 2019, the revenue of Longgao Co., Ltd. was 224.8 million yuan, 225.6 million yuan and 237.4 million yuan, and the net profit was 59.47 million yuan, 71.43 million yuan and 82.43 million yuan, respectively. Longgao shares such a large-scale production capacity, its annual net profit in recent years has not exceeded 100 million yuan.

However, according to the announcement of Haiyue Energy, Longgao co., Ltd. products are kaolin for ceramics; while Northwest Resistant Energy intends to produce medical kaolin, special grade fine kaolin, cosmetic grade kaolin, paper grade kaolin and other products. There seems to be a difference in the product between the two.

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