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Yangtze Business Daily News● Yangtze Business Daily reporter Xu Jingli

Changyuan Electric Power (000966.SZ)'s private placement has been approved.

According to the announcement of Changyuan Power, the company received the "Approval on the Registration of Issuance of Shares to Specific Objects by China Energy Group Changyuan Power Co., Ltd." issued by the China Securities Regulatory Commission on July 12, and the company's registration for the private placement was approved.

The company plans to raise no more than 3 billion yuan in this private placement. After deducting issuance expenses, the raised funds will be invested in 10 photovoltaic power generation projects and to supplement working capital.

In recent years, Changyuan Power has vigorously increased its transformation to new energy. The company's fixed assets increased from 15.088 billion yuan at the end of 2020 to 25.151 billion yuan at the end of 2023. At the same time, the company's new energy power generation increased significantly. From January to June 2024, the company's cumulative power generation was 18.227 billion kWh, a year-on-year increase of 18.93%, of which new energy power generation increased by 199.85% year-on-year.

With the optimization of energy structure, Changyuan Power has achieved a significant increase in profits in the past two years. In the first quarter of this year, Changyuan Power achieved operating income of 4.224 billion yuan, a year-on-year increase of 7.66%; net profit attributable to the parent company was 250 million yuan, and net profit after deducting non-recurring gains and losses was 244 million yuan, a year-on-year increase of 12.95% and 11.30% respectively.

2.523 billion raised for photovoltaic power station construction

Changyuan Power is a listed company controlled by the State Energy Investment Group. It was established in April 1995. Its main business is the production and sales of electricity and heat. Its business segments mainly include thermal power, hydropower, new energy power generation and electricity sales.

As a traditional coal-fired power company, Changyuan Power's performance is significantly affected by factors such as coal prices, which can be reflected in the gross profit margin indicator that reflects profitability. From 2021 to 2023, Changyuan Power's comprehensive gross profit margin was 1.33%, 4.84%, and 8.65% respectively. To this end, in recent years, the company has accelerated the development of new energy industries such as hydropower, wind power, and photovoltaic power generation. As of the end of December 2023, Changyuan Power's total controllable installed capacity was 10.4947 million kilowatts, including 8.31 million kilowatts of thermal power units, 1.3136 million kilowatts of photovoltaic units, 585,500 kilowatts of hydropower units, and 264,000 kilowatts of wind power units. The installed capacity of thermal power units accounts for nearly 80%.

In January this year, Changyuan Power disclosed a prospectus for issuing shares to specific objects. The company plans to raise 3 billion yuan for the construction of new energy projects and to supplement working capital. Changyuan Power believes that this move will help further increase the proportion of the company's photovoltaic installed capacity, help the company improve its business structure, improve performance stability, and enhance the company's core competitiveness.

The latest announcement shows that Changyuan Power's registration for additional issuance has been approved. Specifically, the company's total amount of funds raised from the issuance of shares will not exceed 3 billion yuan, and the issuance targets will be no more than 35 specific targets, including the company's controlling shareholder, China Energy Group. The company's controlling shareholder, China Energy Group, intends to subscribe for an amount of no less than 900 million yuan and no more than 1.5 billion yuan.

The net amount of funds raised after deducting issuance expenses will be used for the second phase project of Hanchuan City's million-kilowatt new energy base, the third phase project of Hanchuan City's million-kilowatt new energy base, the second phase 100MW project of the million-kilowatt new energy multi-energy complementary base of State Energy Changyuan Suizhou City Sui County, the photovoltaic power station of the Zhongxiangzi project of the million-kilowatt new energy base of State Energy Changyuan Jingmen City Source Network Load Storage, the 200MW fishery-photovoltaic complementary power generation project of State Energy Changyuan Qianjiang Haokou, the 230MW agricultural-photovoltaic complementary power generation project of State Energy Changyuan Lengji Town, Gucheng County, the 100MW fishery-photovoltaic complementary power generation project of State Energy Changyuan Jinan Town, Jingzhou City, the 100MW agricultural-photovoltaic complementary power generation project of State Energy Changyuan Yanduhe Town, Badong County, the 70MW agricultural-photovoltaic complementary power generation project of State Energy Changyuan Luohan Temple in Qujialing, Jingmen (Phase I), and the 50MW agricultural-photovoltaic complementary power generation project of State Energy Changyuan Shengkang Town, Gucheng County, and other 10 new energy projects, as well as to supplement working capital.

Of this, 477 million yuan will be used to supplement working capital, which means that about 2.523 billion yuan of the raised funds will be invested in 10 new energy projects. The total installed capacity of the 10 photovoltaic power generation projects is 2.35 million kilowatts.

Energy structure optimization and performance improvement

This private placement is part of Changyuan Power's efforts to increase its investment in new energy. According to incomplete statistics, since 2022, Changyuan Power has announced a total investment of more than 25 billion yuan in new energy projects.

The financial report shows that at the end of 2022, Changyuan Power's projects under construction were 7.6 billion yuan, a year-on-year increase of 443%. By the end of 2023, the projects under construction dropped to 2.276 billion yuan. At the end of 2020, the book value of Changyuan Power's fixed assets was 15.088 billion yuan, accounting for more than 70% of the total assets. By the end of 2023, fixed assets reached 25.151 billion yuan. Changyuan Power said that the company continued to carry out the construction of thermal power, photovoltaic and other projects. As the projects under construction are gradually converted to fixed assets, the book value of the company's fixed assets will further increase.

Changyuan Power has repeatedly increased its investment in new energy in recent years, which can also be reflected in its power generation. According to an announcement released by Changyuan Power in early July, the company completed 3.282 billion kWh of power generation in June 2024, a year-on-year increase of 36.22%; among them, thermal power generation increased by 50.38% year-on-year, hydropower generation decreased by 58.31% year-on-year, and new energy power generation increased by 48.33% year-on-year. The company's cumulative power generation from January to June 2024 was 18.227 billion kWh, a year-on-year increase of 18.93%; among them, the cumulative power generation of thermal power increased by 14.18% year-on-year, the cumulative power generation of hydropower increased by 7.26% year-on-year, and the cumulative power generation of new energy increased by 199.85% year-on-year.

Changyuan Power revealed at a previous performance briefing that the company will continue to increase investment in clean and renewable energy such as wind power and photovoltaics, and further expand the proportion of new energy. By the end of the 14th Five-Year Plan period, the company's total installed capacity of new energy will exceed 4 million kilowatts, and by the end of the 15th Five-Year Plan period, the company's clean energy will account for more than 40%.

With the optimization of energy structure, Changyuan Power has achieved a significant increase in profits in the past two years. Data shows that in 2022 and 2023, Changyuan Power's operating income will be 14.662 billion yuan and 14.457 billion yuan, respectively, up 20.54% and -1.40% year-on-year; net profit attributable to the parent company will be 123 million yuan and 349 million yuan, up 584.72% and 184.07% year-on-year; net profit after deducting non-recurring gains and losses will be 51.202 million yuan and 342 million yuan, up 118.39% and 568.70% year-on-year, respectively.

In the first quarter of this year, Changyuan Power achieved operating income of 4.224 billion yuan, a year-on-year increase of 7.66%; achieved net profit attributable to shareholders of 250 million yuan and net profit after deducting non-recurring gains and losses of 244 million yuan, a year-on-year increase of 12.95% and 11.30% respectively.

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