On July 7, Grandblue Environment (600323. SH) disclosed that the company is planning to privatize and acquire Canvest Environmental Power Co., Ltd. (01381.HK), a company listed on the Hong Kong Stock Exchange, through its indirect subsidiary, Grandblue (Hong Kong) Environmental Investment Co., Ltd. (hereinafter referred to as "Grandblue Hong Kong") by way of a scheme of arrangement. HK) (hereinafter referred to as "Canvest"), the indicative cancellation price of the transaction is tentatively set at HK$4.90 per share, and the overall amount corresponding to 100% equity is about HK$11.95 billion. Upon completion of the transaction, Canvest will become a subsidiary of Hanlan Hong Kong Holdings and will be delisted from the Hong Kong Stock Exchange.
State-owned assets cooperation supports strategic industrial restructuring
Build the main environmental protection industry chain
M&A and restructuring is an important means to promote industrial integration and listed companies to become better and stronger. In recent years, Guangdong Province has made arrangements around high-quality development, vigorously promoted the high-quality development of listed companies and the strengthening of the industrial chain, and supported high-quality listed companies to carry out industrial chain mergers and acquisitions, so as to achieve stronger, better and bigger. This year, the "New Nine Articles" clearly stated that listed companies are encouraged to focus on their main business, comprehensively use mergers and acquisitions, equity incentives and other methods to improve the quality of development, and promote listed companies to enhance their investment value.
According to the announcement, the transaction will be jointly implemented by Guangdong Hengjian Investment Holding Co., Ltd. (hereinafter referred to as "Guangdong Hengjian") and Guangdong Nanhai Holding Group Co., Ltd. (hereinafter referred to as "Nanhai Holdings"). According to the data, Guangdong Hengjian is a wholly state-owned company that performs the duties of an investor by the State-owned Assets Supervision and Administration Commission of Guangdong Province, and is a state-owned capital operation company at the Guangdong provincial level; The actual controller of Nanhai Holdings is the State-owned Assets Supervision and Administration Bureau of Nanhai District, Foshan City, which is the same actual controller as Hanlan Environment.
In addition, the reporter also learned that as early as 2022, the Foshan Municipal Government signed a strategic industry promotion and development cooperation agreement with Guangdong Hengjian to strengthen cooperation around Foshan's key industries and key projects, help the core enterprises of the industrial chain accelerate their development, the high-quality development of listed companies, and promote the development and growth of Foshan's strategic emerging industrial clusters.
Industry insiders said that Guangdong Hengjian's participation in the investment is an important measure to promote the construction and improvement of major infrastructure in the Guangdong-Hong Kong-Macao Greater Bay Area, and is expected to build a "chain master" enterprise in Guangdong's environmental protection industry.
As one of the strategic emerging industries in Nanhai District, Foshan City, the environmental protection industry is an important starting point for the transformation and upgrading of economic structure and the construction of "Brand Nanhai". As a major shareholder of Grandblue Environment, Nanhai Holdings has increased its efforts to help Grandblue Environment expand and strengthen its core business, reflecting its confidence in the future development of Grandblue Environment.
Increase high-quality incineration power generation projects
Hanlan is expected to jump to the first place in A-shares and the top three in the industry
Canvest Environmental Protection is the largest waste-to-energy enterprise in Guangdong Province, with a total municipal solid waste treatment capacity of 54,540 tons per day. In 2023, most of the company's waste-to-energy projects will be put into operation, and the project construction revenue will drop by 76.7%, resulting in a decline in revenue, but the company's gross profit margin has increased significantly to 41.8%; Excluding construction business expenses, the company's operating income increased by 1.6% year-on-year, and the cash flow from operating activities reached HK$1.935 billion, with the quality of earnings and financial soundness continuing to improve, and the hematopoietic capacity of the business steadily enhanced.
According to public information, Canvest's environmental protection projects cover 12 provinces and cities including Guangdong, Shanghai, Sichuan, Shandong, and Jiangsu, of which 17 projects are located in Guangdong Province, which has a large demand for waste treatment, accounting for 49% of the total treatment capacity. At the same time, with its location advantages and refined operation, the overall capacity utilization rate of Canvest's environmental waste-to-energy business exceeded 100%. In addition, as a number of projects have entered a period of stable operation, Canvest's capital expenditure has decreased significantly year-on-year, and its operating cash flow has improved significantly, with the potential for high dividend payout.
In recent years, the country has vigorously promoted the construction of "zero-waste cities", and the solid waste treatment industry has ushered in unprecedented development opportunities. As the core link of solid waste treatment, waste-to-energy incineration is the terminal treatment facility of municipal solid waste, which plays a very important role in the solid waste industry chain. As a leading enterprise in comprehensive environmental protection operation in the field of solid waste treatment, Grandblue Environment firmly implements the strategy of "large solid waste", builds a development pattern of "one body, two wings" with solid waste as the core body and energy and water affairs as the two wings, and actively grasps the window period for high-quality domestic waste incineration power generation projects, and continues to expand the scale of domestic waste incineration power generation and treatment.
According to the analysis of waste incineration scale data disclosed in the annual reports of Hanlan Environment and Canvest Environmental Protection, after the completion of this transaction, the waste treatment capacity of Hanlan Environment's operating projects will reach 73,500 tons/day, and the projects to be built and planned will reach 16,800 tons/day, with a total of more than 90,000 tons/day, which is expected to jump to the first place in A-shares and the top three in the industry.
The industry leader joins forces
The synergistic "big solid waste" imagination has a broad space
The reporter learned that at present, Grandblue Environment and Canvest Environmental Protection have a number of waste-to-energy projects in hand, among them, most of the projects of Grandblue Environment are located in Fujian Province, and many projects of Canvest Environmental Protection are located in Guangdong Province.
According to the information, Canvest has obtained a service contract of HK$2.8 billion for the garbage transfer business in Hong Kong to provide garbage transfer services for Hong Kong. At the same time, Canvest Environmental Protection is also a subsidiary of Hong Kong Johnson Holdings (01955. HK). Based on Canvest's in-depth familiarity with the Hong Kong environmental protection market, it will also create space for the international development of Grandblue Environment in the future.
Canvest Environmental and Grandblue Environment both attach great importance to ESG management and have been recognized by the industry, and Canvest Environmental has won the Hong Kong ESG Disclosure Pioneer Award and ESG Leading Enterprise Award. Grandblue Environment has won honors such as the Top 100 ESG Listed Companies in China and the Top 10 Listed Companies in the Guangdong-Hong Kong-Macao Greater Bay Area.
As a leader in the environmental protection industry, Grandblue Environment and Canvest have maintained a steady development trend and excellent market performance. Throughout the development of Grandblue Environment since its listing in 2000, it has completed a number of major mergers and acquisitions, extending from a single business to comprehensive services, rapidly expanding its business scale, and accumulating rich experience in mergers and acquisitions. Industry insiders said that their union will not only bring the resources and market complementary advantages of the environmental protection industry, but also is expected to create a more competitive environmental protection service model through collaborative innovation and optimization of resource allocation, leading the industry to continue to develop to a higher level.
Text/Nanhai financial media reporter Li Chunmei
Correspondent: Zhong Yanting
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