Guangzhou Development recently released the 2021 non-public issuance of A-share shares (revised draft). The Company intends to issue no more than 818 million shares and no more than RMB5.627 billion for city gas, integrated energy services, new energy projects and loan repayment.
In recent years, the company has increased its investment and mergers and acquisitions in the new energy business, and the increase in capital expenditure and financing has led to the expansion of the company's debt scale and an upward trend in the asset-liability ratio.
It is planned to raise an additional capital of 5.627 billion yuan, and more than 70% of the funds will be invested in city gas projects
Guangzhou Development's non-public offering of shares is aimed at no more than 35 (including 35) specific investors, including guangzhou Guofa, the company's controlling shareholder. Since Guangzhou Guofa is the controlling shareholder of the company and has a related relationship with the company, the non-public issuance of shares constitutes a related party transaction. According to the announcement, Guangzhou Guofa does not participate in the market auction process, but promises to accept the results of the market auction, and the number of shares subscribed is not less than 166 million shares.
The company intends to issue no more than 818 million shares and intends to raise no more than 5.627 billion yuan for city gas, integrated energy services, new energy projects and loan repayment.
Figure 1: Details of the proposed fundraising of the Guangzhou Development Fixed Increase Plan
Specifically, Guangzhou Development intends to invest more than 75% of the raised funds into city gas projects. According to the data, Guangzhou Gas Group, a wholly-owned subsidiary of Guangzhou Development, is the only main body in the construction and purchase and sale of urban gas high-pressure pipe network in Guangzhou, coordinating the construction of the city's high-pressure pipe network and the purchase and sale of upstream gas sources. The four urban gas projects that Guangzhou Development intends to use the raised funds to invest in the construction are all implemented by Guangzhou Gas Group and its wholly-owned subsidiaries.
Guangzhou Development said that if the city gas project can be successfully implemented, it will help enhance the stability and competitiveness of the company's natural gas industry chain and supply chain.
In addition, Guangzhou Development plans to invest 437 million yuan and 220 million yuan in integrated energy services and new energy projects respectively, which will accelerate the company's transformation to low-carbon energy and new energy after the implementation of the project.
The performance growth in the first half of 2021 will continue to benefit from the rise in electricity prices and gas prices in the future
Judging from the recent performance, in the first half of 2021, Guangzhou Development achieved operating income of 17.876 billion yuan, an increase of 27.16% over the same period of the previous year; and achieved a net profit attributable to the mother of 664 million yuan, an increase of 23.66% over the same period of the previous year, an increase of more obvious than in previous periods.
Figure 2: 2016h1-2021h1 Guangzhou development of total operating income, net profit attributable to the mother and year-on-year growth rate
From the perspective of specific business, the power business benefited from the sharp rise in social electricity demand in the first half of the year, and the comprehensive electricity price achieved a year-on-year increase, and in the first half of 2021, the company's consolidated caliber thermal power generation enterprises completed a power generation capacity of 8.793 billion kWh, an increase of 30.28% year-on-year.
In terms of gas business, Guangzhou Gas Group completed natural gas sales of 1.159 billion cubic meters in the first half of the year, an increase of 26.09% year-on-year. The data shows that since March 2021, the domestic LNG price has risen from 3320 yuan / ton to 6072.8 yuan / ton on September 30, an increase of more than 80%. If natural gas prices continue to rise or remain high in the future, the company's gas business will continue to benefit.
Figure 3: Domestic LNG market price since January 2021 (yuan/ton)
Continue to increase the size of the new energy business The asset-liability ratio shows an upward trend
In addition to the above two major businesses, Guangzhou Development has also increased its business development and investment and mergers and acquisitions in the new energy business.
In January 2021, Guangzhou Development disclosed its foreign investment announcement that its wholly-owned subsidiary, Guangzhou Development New Energy Co., Ltd., intends to purchase 100% of the equity of Guangdong Rundian New Energy Co., Ltd. for 1.383 billion yuan.
In addition to mergers and acquisitions, the company's capital expenditure on the technical transformation, expansion and purchase of fixed assets is large. Guangzhou's development mainly finances through bank borrowings, bonds and other liabilities, resulting in a higher debt scale.
According to the bond-related announcement released by Guangzhou Development on October 8, as of the end of June 2021, the company's cumulative borrowing balance was 21.956 billion yuan, the cumulative new borrowing amount was 7.366 billion yuan, and the proportion of cumulative new borrowings to net assets at the end of 2020 was 34.99%, more than 20%; the company's asset-liability ratio was 58.61%, up 7.12 percentage points from the end of the previous year.
Figure 4: 2016-2021h1 Guangzhou development asset-liability ratio
Guangzhou development in recent years the asset-liability ratio has shown an upward trend, due to the company's industry has a capital-intensive characteristics, the future with the increase in investment projects and scale, the company's asset-liability ratio and capital expenditure or will further increase. In order to effectively reduce the company's asset-liability ratio and improve financing and asset structure, Guangzhou Development will use 690 million yuan of raised funds to repay bank loans.
This article originated from Bread Finance