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Yangtze Business Daily News● Yangtze Business Daily reporter Xu Jia

As it is about to change its ownership to Huangshan State-owned Assets, Guangyang Co., Ltd. (002708.SZ) is leveraging this opportunity to actively develop a new energy industry chain.

Recently, Guangyang shares disclosed the change of shareholders' equity. The actual controller of the company, Yangzhou Fuhai Guangyang Equity Investment Fund Partnership (Limited Partnership) (hereinafter referred to as "Fuhai Guangyang Fund"), intends to transfer 81.667% of the equity of Changzhou Guangyang Holdings Co., Ltd. (hereinafter referred to as "Guangyang Holdings") to Huangshan Jiantou Fuhai Guangyang Equity Investment Fund Partnership (Limited Partnership) (hereinafter referred to as "Huangshan Fuhai Fund"), with the transaction price being approximately RMB 1.157 billion.

After the completion of this transaction, Guangyang Holdings will remain the controlling shareholder of Guangyang Shares, Huangshan Fuhai Fund will acquire the controlling stake in Guangyang Holdings, and the State-owned Assets Supervision and Administration Commission of the Huangshan Municipal People's Government (hereinafter referred to as "Huangshan SASAC") will become the actual controller of the listed company.

The introduction of a controller with state-owned and industrial background may help boost Guangyang Shares' business development and profitability.

However, the Yangtze Business Daily reporter noticed that the previously acquired electronic business has been in a loss-making state, dragging down Guangyang's performance. Data shows that from 2021 to the first half of 2024, the company's cumulative losses exceeded 400 million yuan.

It is worth noting that this time, Guangyang Co., Ltd. also signed a "Strategic Cooperation Framework Agreement" with the Management Committee of Anhui Huangshan High-tech Industrial Development Zone. The company will jointly layout the new energy industry chain with the local government of Huangshan and promote the development of the new energy vehicle industry.

The actual controller of the company is expected to change

After several days of planning, the change of control of Guangyang Shares has made new progress.

Recently, Guangyang Shares disclosed an announcement that Fuhai Guangyang Fund, the shareholder of the company's controlling shareholder Guangyang Holdings and the company's actual controller, has signed a "Transfer Agreement" with Huangshan Fuhai Fund, and Huangshan Fuhai Fund has acquired 81.667% of the equity of Guangyang Holdings held by Fuhai Guangyang Fund.

Prior to this change, Guangyang Holdings held 24.70% of the shares of the listed company, and Fuhai Guangyang Fund held 99.885% of the shares of Guangyang Holdings. By controlling Guangyang Holdings, it indirectly controlled the voting rights corresponding to 24.70% of the shares of the listed company and was the actual controller of the listed company.

After this change, Guangyang Holdings' 24.70% stake in the listed company remains unchanged, and Huangshan Fuhai Fund holds 81.667% of Guangyang Holdings' shares, making it the controlling shareholder of Guangyang Holdings. By controlling Guangyang Holdings, it indirectly controls the voting rights corresponding to 24.70% of the listed company's shares. Therefore, the actual controller of the listed company has changed to Huangshan Fuhai Fund's actual controller, Huangshan State-owned Assets Supervision and Administration Commission.

The Yangtze Business Daily reporter noted that in this transaction, the transaction price of Guangyang Holdings' 81.667% equity was about 1.157 billion yuan. In other words, Huangshan Municipal State-owned Assets Supervision and Administration Commission will indirectly acquire Guangyang Holdings' 24.7% equity at a price of 1.157 billion yuan. As of the close of July 29, Guangyang Holdings' secondary market share price was 7.82 yuan per share, with a total market value of about 4.396 billion yuan, and the market value of its 24.7% equity was about 1.086 billion yuan.

According to information, Guangyang Co., Ltd. was established in 1994. After obtaining IPO approval in 2012, it was listed on the A-share market in early 2014.

At the end of 2018, Guangyang Shares, which had been listed for five years, planned a change of control. The company's original actual controller sold the controlling rights of the listed company to Fuhai Guangyang Fund. In October 2019, all industrial and commercial changes of the relevant equity transactions were completed.

Huangshan Fuhai Fund withdrew after nearly five years of ownership and introduced a state-owned controller to Guangyang Shares, which may help Guangyang Shares to develop steadily in the future.

Guangyang Co., Ltd. also stated that this change has introduced a controller with state-owned and industrial backgrounds to the company, which will help further enhance the competitiveness of the company's existing main business. At the same time, it will provide support and empowerment for the optimization of the company's industrial structure and the cultivation and trial of new businesses and new industries, improve the company's profitability, and benefit the company's long-term development and the realization of its strategic goals.

Increasing investment in new energy business

In fact, Guangyang Co., Ltd.'s operating performance has fluctuated greatly in recent years.

According to the data, Guangyang Co., Ltd. was originally mainly engaged in the research and development, manufacturing and sales of automotive precision bearings. In December 2020, Guangyang Co., Ltd. acquired Weihai Shiyi Electronics and Weihai Gaoyatai Electronics, and its main business expanded to include the production and sales of electronic circuit boards and electronic components.

After going public in 2014, Guangyang's net profit reached a peak of 64.5094 million yuan in 2016. However, the company's performance declined sharply in 2017, and it suffered a loss of 90.4036 million yuan in 2018, the first loss since its listing.

In 2019, the first year after Guangyang Co., Ltd. changed its ownership, the company turned losses into profits of 11.5298 million yuan, and the net profit increased significantly to 50.358 million yuan the following year. However, the good times did not last long, and Guangyang Co., Ltd. fell into losses again in 2021.

From 2021 to 2023, Guangyang Co., Ltd. achieved operating income of 1.622 billion yuan, 1.488 billion yuan, and 1.823 billion yuan, a year-on-year increase of 13.11%, -8.29%, and 22.53%; the net profit was a loss of 81.2381 million yuan, 234 million yuan, and 117 million yuan, respectively, and the net profit after deducting non-recurring gains and losses (net profit after deducting non-recurring gains and losses, the same below) was a loss of 123 million yuan, 247 yuan, and 153 million yuan, respectively. The total losses in three years were 432 million yuan and 523 million yuan, respectively.

A reporter from the Yangtze Business Daily noticed that Weihai Shiyi Electronics, which was acquired earlier, has been in a loss-making state after the consolidation, which has increased the performance burden of Guangyang Shares.

Data shows that from 2021 to 2023, Weihai Shiyi Electronics achieved operating income of 62.5365 million yuan, 58.9323 million yuan, and 168 million yuan, respectively, and net profit losses of 98.8246 million yuan, 170 million yuan, and 139 million yuan, respectively, with a total loss of approximately 408 million yuan in three years.

Guangyang's performance has improved this year. Recently, Guangyang released its performance forecast, predicting that the company will achieve a net profit of 30 million to 45 million yuan in the first half of 2024, a year-on-year increase of 177.38% to 216.07%; non-net profit of 35 million to 50 million yuan, a year-on-year increase of 149.91% to 171.29%. However, based on the lowest estimate, the company's cumulative losses in three and a half years exceeded 400 million yuan.

Guangyang shares said that the overall growth of the industry and the ramp-up of the company's new projects helped the company achieve a significant increase in revenue in the first half of the year. On the one hand, since 2024, the production and sales of the domestic passenger car market have increased year-on-year, automobile exports have maintained rapid growth, and the market share of new energy vehicles has steadily increased, providing a good market foundation for the company's continued development; on the other hand, in recent years, the company has kept up with market development trends, continuously optimized product and business structure, accelerated the development of new energy vehicles and international business, and designated many new projects. The continuous ramp-up of various projects in the first half of the year has promoted the overall rapid growth of the company's sales revenue. The scale effect and the optimization of product structure have helped the company's overall profitability to improve.

It is worth noting that Guangyang shares regards new energy vehicle business as the focus of future development. This time, Guangyang shares also signed a "Strategic Cooperation Framework Agreement" with the Anhui Huangshan High-tech Industrial Development Zone Management Committee.

This cooperation will help Guangyang Shares to improve the upstream and downstream industrial chain layout of new energy vehicle parts and reduce the cost of the company's industrial chain by leveraging local resources and preferential policies in Huangshan. At the same time, the company will work with the local government of Huangshan to jointly layout the new energy industrial chain and promote the development of the new energy vehicle industry.