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Produced by Radar Finance Hongtu | Edited by Li Yihui | Deep Sea

On July 25, ENN Energy closed at HK$57.95, down 1.1%. Since May 20, ENN Energy has seen a wave of declines, with a total decline of 22.28% in 47 trading days.

On August 26, 2021, the share price of ENN Energy reached a high of HK$162.29. Based on this calculation, the company's latest share price has fallen by HK$104.34 from its highest point, and its market value has evaporated by HK$118.032 billion.

Radar Finance noted that ENN Energy is the flagship industry of Hebei tycoon Wang Yusuo. As of now, Wang Yusuo has four listed companies under his control: ENN Shares, ENN Energy, New Intelligence Cognition, and Tibet Tourism.

Tianyancha data shows that Wang Yusuo holds positions in 57 companies and is the legal representative of 38 companies.

In the 2018 Hurun Rich List, Wang Yusuo and his wife Zhao Baoju became the richest people in Hebei with a fortune of 62 billion yuan. In the latest Hurun Global Rich List, Wang Yusuo and Zhao Baoju's net worth is 56 billion yuan, and in 2023 it is 67 billion yuan. Based on this calculation, Wang Yusuo and his wife's net worth has shrunk by 11 billion yuan compared with the previous year, but they are still the second richest family in Hebei Province.

Like most of the first generation of self-made rich people, Wang Yusuo came from a poor family before he became rich, but he embarked on the road of entrepreneurship on the edge of being a "ten thousand yuan debtor" and built his own Xinao Group business building with the gas business as the starting point. However, with the decline in international gas prices in the past year, the natural gas industry is facing challenges from macroeconomics, climate change, energy substitution and price fluctuations, and the performance of "Xinao" companies is also facing pressure to varying degrees.

The former richest man in Hebei with 56 billion

In the Hurun Global Rich List released in March this year, Wei Jianjun and Han Xuejuan, a couple from Great Wall Motors, ranked first in Hebei Province with 110 billion yuan; following closely behind were Wang Yusuo and Zhao Baoju, a couple from Sinopec, who ranked 342nd in the world with 56 billion yuan and were the second richest people in Hebei.

Many wealthy people in China have legendary experiences, and Wang Yusuo is no exception. Public information shows that Wang Yusuo was born in March 1964 in Bazhou, Hebei.

About 35 kilometers east of Bazhou City is Shengfang Town, which has a history of more than a thousand years. It has been a gathering place for merchants since ancient times and has a strong sense of business. Wang Yusuo, who grew up in Shengfang Town, had the seeds of doing business planted in his heart early on.

In 1984, 20-year-old Wang Yusuo decided to go into business after failing the college entrance examination three times. At that time, the huge wave of reform and opening up made everyone eager to make a move, and some families with small businesses became millionaires.

However, when Wang Yusuo's family was "testing the waters" by participating in the contracting business, they accidentally messed it up and suddenly became "a millionaire who owed others money." Wang Yusuo also had to bear a "huge foreign debt" of 20,000 yuan.

However, despite the adversity, Wang Yusuo possessed the common advantages of all successful entrepreneurs, good at observation, daring to think and act. He carefully discovered that some wealthy families at that time had already started using liquefied gas to cook, which was clean and convenient, so he decided to start a gas business.

"I started my entrepreneurial journey on the edge of life," Wang Yusuo later recalled. However, at the beginning, Wang Yusuo had no capital, so he could only trade in the "futures" way of "registering first, paying money, and picking up the goods one month later."

Despite this, Wang Yusuo's liquefied gas business became more and more popular. He soon paid off the 20,000 yuan foreign debt he owed and earned his "first pot of gold".

In 1992, Wang Yusuo's ENN Gas Company was established. The following year, by cooperating with the North China Oilfield, it won three gas wells and introduced oil-associated gas into the Langfang Development Zone and the urban area of ​​Langfang. This also became the beginning of ENN's main business of urban gas operation.

As one of the first private enterprises to enter the public utilities sector, Wang Yusuo has undoubtedly made history.

In 1998, the state introduced relevant policies to allow diversified investment in the public utilities sector. At the same time, the "West-East Gas Transmission" project was officially launched, and ENN Gas began to embark on the road of expansion.

In this project, ENN Gas began to build a network in cities along the West-East Gas Pipeline, and successively established branches in Jiangsu, Anhui and Beijing, winning gas operation rights in 25 cities. By 2001, ENN's presence in 60 cities had increased, and its total assets soared to more than 6 billion yuan, thus establishing the ENN Empire.

By seizing historical opportunities many times, Wang Yusuo's Xin Ao Group has grown stronger step by step and entered the capital market.

In 2001, ENN Gas (renamed "ENN Energy" in 2010) was listed on the Hong Kong Stock Exchange.

At present, ENN Energy has become the flagship industry of ENN Group and one of the largest clean energy distributors in China. Its main businesses include natural gas business, pan-energy business and smart home business.

Good at playing in the capital market

Although the city gas business is booming, Wang Yusuo is worried. He is afraid that Sinopec provides a simple "gas selling" service, and once upstream resources are restricted, it may suffer a fatal blow at any time.

In order to eliminate this hidden danger, Wang Yusuo thought about it and decided to move upstream. In December 2004, ENN Group and ENN Investment acquired Weiyuan Biochemical's parent company, Weiyuan Group, renamed it ENN Ecological Shares, and invested in the construction of a coal chemical production base to study coal-to-gas.

With an annual income of only 2.5 billion yuan, Wang Yusuo's decision to invest 2.1 billion yuan to enter the field of clean coal utilization encountered great resistance within the company. However, through his efforts, everyone finally reached a consensus, and this gamble was successfully carried out at ENN.

In addition to breaking the bottleneck of upstream gas sources, 2008 was another important turning point for Wang Yusuo. At that time, central enterprises such as PetroChina and China Resources were making large-scale layouts in the natural gas market, which put ENN Gas in a dilemma of being squeezed out.

Facing the unexpected changes, Wang Yusuo was more determined to transform, and ENN Group put R&D investment first. Finally, in 2012, ENN's "coal-to-gas" technology reform was successful, which can directly turn coal fields into gas fields in deep wells.

During this period, Wang Yusuo's ENN Holdings became the controlling shareholder of listed company Weiyuan Biochemical by participating in the subscription of shares. In January 2015, the company was officially renamed ENN Shares. In the subsequent development, the company's business has gradually moved from coal-based clean energy production in the upstream energy sector to becoming an intelligent ecological operator for the natural gas industry.

So far, Wang Yusuo has created two listed platforms. In March 2015, Beibu Gulf Travel, controlled by Wang Yusuo, went public. Its business covers marine tourism, health tourism, scenic spot operation and development, and smart tourism. However, with the name change to "New Intelligence Cognition" in 2018, the company has transformed into a digital intelligence operator focusing on urban safety.

Although Xinzhi Cognition no longer operates in the tourism business, Wang Yusuo has not given up on the layout of the tourism industry. In July 2018, Xin Ao Holdings became the indirect controlling shareholder of Tibet Tourism through equity acquisition, and Wang Yusuo officially became the actual controller of Tibet Tourism.

Since then, capital operations led by Wang Yusuo have also begun to be staged frequently. For example, Wang Yusuo tried to separate the listed asset "Xinyi Cruise" of Xinzhi Cognition from Xinzhi Cognition and put it into Xinao Holdings, and then introduced it into Tibet Tourism.

This "left hand to right hand" capital operation was launched in 2021, but was forced to terminate at the end of that year after inquiries from the exchange. However, in July 2023, Tibet Tourism restarted the transaction of acquiring Xinyi Cruise from the actual controller, and is still promoting related transactions.

ENN Shares, an important A-share capital platform under Wang Yusuo, has also carried out capital operations many times. As early as 2014, ENN Shares acquired 100% of the equity of Shanxi Qinshui ENN and CNOOC ENN (Beihai) Gas Co., Ltd. That year, the company also acquired 100% of the equity of Xinneng Phoenix.

In September 2019, ENN Shares initiated a major asset reorganization, acquiring a 32.81% stake in Hong Kong-listed company ENN Energy for nearly RMB 26 billion.

One year later, the transaction was completed. On the surface, this was just a transfer of control rights under the same control, but the injection of natural gas assets has greatly increased the revenue and assets of ENN Shares, and the company's market value has also soared.

On October 19, 2023, ENN Group completed the delivery of 100% equity of Xinneng Mining and received the total transaction price of 10.505 billion yuan. Xinneng Mining is mainly engaged in coal production and sales, and was acquired by ENN Group for 7.2 billion yuan in 2013. ENN Group said that the divestiture of coal mine assets will help the company further focus on its main business of natural gas.

"Xin Ao Group" companies are under operating pressure

Radar Finance noticed that after selling its coal mining assets and returning to its main natural gas business, China Resources Power Co., Ltd. experienced fluctuations in performance last year.

The annual report shows that in 2023, the company achieved total operating revenue of 143.754 billion yuan, a year-on-year decrease of 6.68%; and achieved net profit of 7.091 billion yuan, a year-on-year increase of 21.34%.

Regarding the decline in revenue, Guosen Securities believes that this is mainly due to the downward trend in gas prices, a decrease in platform trading gas and wholesale gas revenue, and the divestiture of coal business.

At the same time, in 2023, Xin Ao's net profit attributable to shareholders after deducting non-recurring items was 2.459 billion yuan, a year-on-year decrease of 47.35%. Guosen Securities Research Report pointed out that the main reason for the decline in the company's net profit attributable to shareholders after deducting non-recurring items was the provision of methanol and stable olefin asset impairment and changes in the fair value of derivative financial instruments; the main reason for the large difference before and after deducting non-recurring items was the recognition of investment income of 4.277 billion yuan from the sale of Xinneng Mining.

The decline in international natural gas prices in 2023 also put pressure on ENN Energy's revenue. The company's financial report shows that last year, the company's gas wholesale business revenue and gross profit fell by 0.9% and 60.0% to 29.695 billion yuan and 1.095 billion yuan respectively compared with the previous year, mainly because the international natural gas price fell from a high level, and the Group's international market opportunities were greatly weakened.

The "2023 Oil and Gas Industry Development Report" published by the China National Petroleum Corporation Economic and Technological Research Institute shows that in 2023, global energy prices will generally fall, with oil prices falling by nearly 20% and natural gas and coal prices falling by more than 50%.

Against this backdrop, overall, ENN Energy's turnover in 2023 will increase slightly by 3.5% year-on-year to 113.825 billion yuan, and its core profit will decrease by 4.8% year-on-year to 7.586 billion yuan. At the same time, the company's overall gross profit is also under pressure, down 9% year-on-year to 14.338 billion yuan.

In its 2023 financial report, ENN Energy admitted that 2023 was a "challenging year" and the natural gas industry faced multiple challenges including macroeconomics, climate change, energy substitution and price fluctuations.

Another listed company under the "Xin Ao Group", Xinzhi Cognition, saw a decline in both revenue and net profit in 2023. The financial report shows that the company's revenue in 2023 was about 946 million yuan, a year-on-year decrease of 1.77%; the net profit attributable to shareholders of the listed company was -0.71 billion yuan, a year-on-year decrease of 496.58%.

Among the four listed companies, only Tibet Tourism achieved a significant recovery in performance as the market recovered. The company achieved a net profit attributable to shareholders of approximately 14.5 million yuan in 2023, while its net profit in 2022 was a loss of 29.3806 million yuan, turning losses into profits year-on-year.