800 billion ＂Three Gorges system＂ enters the capital market

From March 16 to 18, Yangtze River Ecological Environmental Protection Group Co., Ltd., a wholly-owned subsidiary of the Three Gorges group, and its joint action heard that the Three Gorges Capital Holding Co., Ltd. (hereinafter referred to as “the Three Gorges capital”) increased its holding of 29.7916 million shares of Xingrong environment (000598.sz) by 1%. After the change, Changjiang environmental protection and its joint action accounted for 221 million shares of Xingrong environmental, accounting for 7.39% of the total share capital.

 

 

 

This is just the tip of the iceberg for the Three Gorges group to attack the capital market. Around the strategic layout of “two wings flying together” of clean power and Yangtze River ecological environmental protection, the new round of capital operation of the Three Gorges group is slowly unfolding.

 

 

 

Since 2019, the Three Gorges group has cooperated with Beikong water (00371. HK), tus environment (000826. SZ), Nachuan (300198. SZ), Wuhan holding (600168. SH) and Guozhen environmental protection (300388. SZ) in the Yangtze River maintenance through “cost plus” mode, equity joint venture, enterprise merger and acquisition and other methods.

 

 

 

Moreover, China’s Three Gorges new power (Group) Co., Ltd. (hereinafter referred to as “Three Gorges new power”), a wholly-owned subsidiary of the Three Gorges group, is rushing for IPO and plans to land on the A-share main board. On February 28, the reporter of China Business News learned from the official website of China Securities Regulatory Commission that the second phase of CITIC Securities’ teaching work on the new power of the Three Gorges project is now completed.

 

 

 

On March 19, the Three Gorges group, in an interview with reporters, said that it was in a silent period and did not respond.

 

 

 

Frequent M & A expansion

 

 

 

Three Gorges group is the largest hydropower development and operation enterprise in the world. By the third quarter of 2019, its total value of property is nearly 817.4 billion yuan.

 

 

 

Now, the Three Gorges group’s “two wings flying together” strategy is to launch the clean power and the Yangtze River ecological environment protection. Among them, around the “Yangtze River ecological environment protection”, the cost operation of the Three Gorges group has been accelerated again and again.

 

 

 

Since 2016, the state has called for “putting the revision of the Yangtze River Ecological Environment in an overwhelming position, focusing on major maintenance and not major development”.

 

 

 

In this setting, Three Gorges group established Yangtze River environmental protection in December 2018. In addition, the Three Gorges group has also participated in the establishment of China’s Yangtze River green development fund, ecological environmental protection industry alliance, special funds for ecological environmental protection and National Engineering Research Center for ecological environmental protection.

 

 

 

Since 2019, through equity joint venture, enterprise merger and acquisition and other methods, the Three Gorges group has spread its network in the water circle. The target enterprises touch Beikong water, Wuhan holding, tus environment, Hongcheng water (600461. SH), wangneng environment (002034. SZ), Guozhen environmental protection, Xingrong environment and Nachuan Co., Ltd.

 

 

 

It is worth mentioning that the Three Gorges group is closely related to the North Water Control in jointly grasping the great maintenance of the Yangtze River. In January 2019, Yangtze River Power (600900. SH), a holding listed company of the Three Gorges group, transferred 471 million shares of Beijing water control to the Three Gorges group; in November of the same year, Beijing water control and Yangtze River environmental protection jointly established the Three Gorges North control Nanjing Water Co., Ltd. and Beijing control Nanjing Water Investment Co., Ltd. In addition, the Three Gorges group, the Three Gorges capital of Beikong water group and Beikong financial services (Beijing) Investment Holding Co., Ltd. jointly initiated the establishment of Yangtze River Green Development Fund Management Co., Ltd.

 

 

 

In June 2019, Yangtze River Environmental Protection Co., Ltd. transferred 106 million shares of Wuhan holding held by Wuhan Water Group with 756 million yuan, accounting for 15% of the total share capital of listed companies; in July, Three Gorges group held 11.6% shares of Guozhen environmental protection Co., Ltd. after fixed increase method; in December of the same year, Yangtze River Environmental Protection Co., Ltd. and its joint action listened to the Three Gorges capital delisting with 1.352 billion yuan to accept Xiong, a subsidiary of tus environment An Pu Hua Water Technology Co., Ltd. 40% equity.

 

 

 

In 2020, “Three Gorges system” has not slowed down the pace of attacking the capital market.

 

 

 

According to Xingrong environmental notice, on February 19, 2020, Changjiang environmental increased its stake in Xingrong environmental by 1.7339 million shares, accounting for 0.06% of the total share capital of the latter. After the change, the Yangtze River environmental protection and its joint action listen to the accumulated capital of the Three Gorges holding 5% of Xingrong environment, which constitutes a licensing.

 

 

 

Subsequently, Changjiang environmental protection and its joint actions increased their holdings again from February 25 to March 13, 16 and 18, 2020. After the equity changes, they calculated to hold 221 million shares of Xingrong environmental, accounting for 7.39% of the total equity.

 

 

 

Along with Xingrong environment, Yangtze River environmental protection and Three Gorges capital also transferred 103.36 million shares of Nachuan on February 24. After the change, Yangtze River environmental protection and the Three Gorges cost calculation held about 109.06 million shares in Nachuan, accounting for 10.57% of the total share capital of the latter.

 

 

 

The reporter noted that many of the Three Gorges group’s joint-stock or investment cooperation enterprises are the national and Yangtze River Economic Belt’s local water leading and professional technology enterprises. By the end of 2019, the Three Gorges group will connect 15 local water channels in the upper and lower reaches of the Yangtze River, and determine eight channel equity cooperation plans. The group has selected 20 equity investment projects with a total investment of 15.4 billion yuan.

 

 

 

In response, the Three Gorges group indicated that the group explored the formation of a “cost plus” model. Through equity joint venture, enterprise merger and acquisition and other methods, the Group invested incremental funds to take over the inventory of related urban sewage treatment plants, pipe networks and other water channels, shorten the time to obtain urban sewage treatment projects, not only did not add local government debt planning, but also brought a lot of funds to the local government for sewage treatment Li.

 

 

 

Three Gorges group is the core of the project Everbright Securities believes that under the current situation of limited willingness of private enterprises to increase leverage and limited space for local enterprises to increase leverage, in order to ensure the stable development of macro-economy, in the short and medium term, the central / state-owned enterprises will still be the pillars of the state for “increasing leverage” and counter cyclical adjustment. The state-owned capital will be the main capital contribution of ecological infrastructure in the next three years, while the private capital needs to give full play to its professional advantages and make its own decisionsAccording to Dr. Guo Yali, deputy chief engineer of Shanghai survey and Planning Research Institute of the Three Gorges group, the Yangtze River maintenance still faces many challenges, including professional integration command and government management ability, integration of plant, river, lake and bank, innovation of comprehensive treatment mode and mechanism of flow (area), as well as severe debt of sewage treatment infrastructure and huge capital investment.

 

 

 

100 billion new power ambition

 

 

 

With the frequent layout in the field of ecological and environmental protection, the new power business of the Three Gorges group is also rushing to the capital market.

 

 

 

In 2010, the Three Gorges group settled down in hydropower and officially started the strategic transformation. In July of the same year, China water conservancy investment group, a wholly-owned subsidiary of the Three Gorges group, officially changed its name to China Three Gorges new power company (before the share reform).

 

 

 

At that time, Cao Guangjing, the third generation “leader” of the Three Gorges group, revealed that the group clearly proposed to actively develop new power such as wind power, and cultivate wind power into the second pillar industry of the group company. Three Gorges new power company will strive to use 3-5 years to complete the listing.

 

 

 

The Three Gorges group seems to have a special interest in wind power. According to the materials, as early as 1999, Three Gorges new power entered the manufacturing field of primary components of wind turbine by means of equity investment, and became the largest equity shareholder of Goldwind technology at that time. Since 2005, Three Gorges new power has entered the development, investment and operation of wind farms. In recent two years, Haiyuan power has become the strategic core of the second main business of the new power of the Three Gorges.

 

 

 

In contrast, photovoltaic business is a little late and the project is not much. According to Golmud daily, the first 5.5MW (phase I) photovoltaic project of Three Gorges new power was connected to grid in 2012. However, the reporter also noted that the company has won many representative projects in recent two years, including Shaanxi Weinan and Tongchuan leading demonstration projects, Inner Mongolia Dalate leading demonstration projects and incentive projects.

 

 

 

By the end of 2019, the new power business of the Three Gorges project has covered 30 provinces, autonomous regions and municipalities directly under the central government. The planned installed capacity of wind power, photovoltaic and small and medium-sized hydropower has exceeded 10 million kilowatts, and the total amount of property is nearly 100 billion yuan.

 

 

 

Perhaps, the new driving force of transformation is the best choice for the Three Gorges group. The reporter learned that as early as the 11th Five Year Plan period, due to environmental protection, immigration and competitors’ horse racing enclosure and other factors, the difficulty of hydropower project development gradually increased. In 2017, Bi Yaxiong, then deputy general manager of the Three Gorges group, pointed out that the first main business of the Three Gorges group is hydropower, but it is estimated that the fundamental development of hydropower will be completed by 2050, “on the one hand, the company needs to find a deadline, on the other hand, it needs to find a new direction, that is, new power, with the largest space for long-term growth.”

 

 

 

The reporter noted that Lu Chun, then the chairman of the Three Gorges group and Secretary of the Party group, stressed the importance of making the Three Gorges new power company stronger, better and bigger, and finally concluded the strategic policy of “scenic Three Gorges”. He also requested that all the Three Gorges new power companies should be listed as soon as possible, so as to build a first-class new power listed company with a market value of 100 billion and an installed capacity of 10 million kilowatts.

 

 

 

And the three-step strategy of “leading to war, share reform and listing” is the plan made by the new power of the Three Gorges to finish the policy.

 

 

 

The reporter learned from the official website of China Property Rights Association that at the end of 2017, Three Gorges New Power Co., Ltd. introduced 8 investors through capital increase and share expansion of Beijing stock exchange, with a total amount of 11.74628 billion yuan, and 8 investors calculated to hold 30% of the shares. Then, in June 2019, Three Gorges new power completed the joint-stock transformation, which means that the company officially entered the sprint stage of listing.

 

 

 

According to the official website of CITIC Securities, CITIC Securities was employed as a training institution for the IPO of Three Gorges new power and listed on the main board. In October 2019, CITIC Securities and Three Gorges new power signed a teaching agreement.

 

 

 

On February 28, the reporter learned from the official website of China Securities Regulatory Commission that the second phase of CITIC Securities’s education on the new power of the Three Gorges project has been completed, which includes four aspects: introducing the requirements of China Securities Regulatory Commission on fund collection projects to the company’s executives, and helping the company to formulate feasible fund collection and investment projects. In addition, the follow-up assistance will include assisting in improving the prospectus and application documents and urging the implementation of internal and external decision-making procedures.

 

 

 

“Listing this year must be completed.” An insider from the Three Gorges group told reporters.

 

 

 

On March 19, Three Gorges new power proved to reporters that the company is now under the guidance of listing, and the completion of listing this year is the internal policy of the company.