Tangshan Accelerates Solar Expansion, Acquires Fanfeng Shares at 20% Premium
Fengfan Co., Ltd., located in Changshu, saw its net profit last year surge by 86.06% to 117.07%, but suddenly "sold out" to Tangshan State-owned Assets.
On February 21, Changshu Fengfan Co., Ltd. announced that the company's controlling shareholder and actual controller, Fan Jiangang, and his co-actors signed a share transfer agreement with Tangshan Financial Control Industry Development Group Co., Ltd. (hereinafter referred to as "Tang Control Industry Development"), intending to transfer 12.67% of the shares held to Tang Control Industry Development for a total price of 742 million yuan.
This transaction not only means that Tangshan State-owned Assets will officially become the controlling shareholder of Fengfan Co., Ltd., but also indicates that Tangshan's layout in the photovoltaic industry will enter a new stage.
At present, the photovoltaic industry is facing a cold winter. Can Tangshan State-owned Assets successfully "break the situation" by increasing its investment in photovoltaics against the trend?
This share transfer is not only a major change for Fengfan Co., Ltd., but also another important layout for Tang Control Industry Development in the field of industrial investment. Through this transaction, Fengfan Co., Ltd. will be able to further accelerate the company's industrial upgrading and business expansion by leveraging the resources and platforms of Tang Control Industry Development and Tangshan State-owned Assets Supervision and Administration Commission, laying a solid foundation for future development.
Advertisement
On February 21, Fengfan Co., Ltd. opened the market and hit the daily limit, then fluctuated and fell to close, reporting 4.44 yuan/share, up 3.26%.
On the evening of February 20, Fengfan Co., Ltd. announced that the company's controlling shareholder and actual controller, Fan Jiangang, and his co-actors Fan Liyi, Fan Yueying, and Yang Jun signed a share transfer agreement with Tang Control Industry Development, intending to transfer about 144.6807 million shares (about 12.67% of the company's total shares) held by them to Tang Control Industry Development.
Among them, the first transfer price is 5.13 yuan/share, which is more than 19% higher than the closing price of 4.3 yuan on February 20, and the transfer price is about 742 million yuan!
In addition, Fan Jiangang and his co-actors also agreed that after all the restricted shares are released, they will transfer their combined 17.32% shares to Tang Control Industry Development. At the same time, the above-mentioned personnel also signed a voting right waiver agreement. From the date of the transfer of the target equity, Fan Jiangang and others waived the voting rights of all the remaining company shares of 434 million shares they held, accounting for 38% of the total share capital.Upon completion of this equity transfer and the relinquishment of voting rights, Tang Control Property Development will become the controlling shareholder of Fanfeng Shares, and the State-owned Assets Supervision and Administration Commission of Tangshan City will become the actual controller of the company.
Fanfeng Shares stated that the transfer of company shares under this agreement will introduce new state-owned strategic investors, which will be beneficial for further optimizing the company's shareholder structure and also conducive to the company's sustainable development.
According to the data, Fanfeng Shares was established in 1993 and went public on the Shanghai Main Board in 2011. It is mainly engaged in the research and development, design, production, and sales of transmission line towers, substation support structures, and communication towers.
The company is known as the "leader in transmission towers" and holds a leading position in the field of ultra-high voltage and ultra-high voltage transmission line towers in China. It is one of the few enterprises in the country capable of producing transmission line towers for the highest voltage level of 1000kV and possessing independent intellectual property rights for the production of composite material insulating pole towers.
In terms of equity structure, Fanfeng Shares is a typical Jiangsu family business. The mid-2023 report shows that Fan Jiangang and shareholder Fan Liyi have a father-son relationship, Fan Jiangang and Fan Yueying have a father-daughter relationship, and Fan Yueying and Yang Jun are a married couple.
Before the transaction, the "Fan family" of four held a total of 50.68% of the company's shares and once ranked 1,112th on the "2019 Hurun Rich List" with a wealth of 3.8 billion yuan.
In the past three years, Fanfeng Shares has faced the challenge of declining performance in its main business, with a net loss of 279 million yuan in 2019. Although the company turned a profit in 2020, with a net profit of over 200 million yuan for the period; performance declined again in 2021 and 2022, with net profits of 93.34 million yuan and 32.25 million yuan, respectively.
However, the company is optimistic about its performance in 2023, expecting a significant increase in net profit attributable to the parent company. On the evening of January 23 this year, Fanfeng Shares disclosed a performance forecast, expecting to achieve a net profit of 60 million to 70 million yuan in 2023, an increase of 86.06% to 117.07% year-on-year.
Analysts believe that as an old steel city, Tangshan's high-strength steel from Tangsteel has been significantly applied in ultra-high voltage transmission projects. Within the Tangshan state-owned capital system, this industrial sector may provide significant support for Fanfeng Shares' traditional advantage in ultra-high voltage transmission line tower business, providing a new growth point for the listed company.
Half a year ago, the company crossed into photovoltaics.On the eve of equity changes, this traditional manufacturing industry leader has been making frequent moves.
At the end of June 2023, Fanfeng Co., Ltd. spent 960 million yuan to complete the cash acquisition of 60% of the shares of Suzhou Jingying Photovoltaic Technology Co., Ltd. As a result, the listed company entered the new energy field, forming an "electricity transmission + photovoltaic" industrial structure.
The announcement shows that Jingying Photovoltaic was established in 2009, with its main business being the research and development, production, and sales of upstream single-crystal silicon rods, polycrystalline silicon ingots, and silicon wafers, and also involving a small amount of battery chips, components, and photovoltaic power station operation business.
At that time, Fanfeng Co., Ltd. stated that this transaction would further increase the company's asset and business scale, optimize the company's industrial structure and asset quality, enhance the company's continuous operation ability and risk resistance, improve the company's comprehensive competitiveness, increase the company's earnings per share, and maximize the interests of all shareholders by injecting high-quality assets.
After completing the consolidation of Jingying in July, Fanfeng Co., Ltd. announced a new 1.2 billion photovoltaic project in November.
The announcement on November 14 shows that Suzhou Jingying's wholly-owned subsidiary, Yangzhou Jingying, plans to sign an investment agreement with the People's Government of Yueyang County to build a new energy industry chain base project in Yueyang County. After the agreement is signed, Yangzhou Jingying will register a wholly-owned legal company in Yueyang County. The total investment of the new energy industry chain base project is about 1.2 billion yuan, including about 700 million yuan for distributed photovoltaic power generation projects and a total of about 500 million yuan for 2GW photovoltaic component intelligent manufacturing industry projects.
On January 6 of this year, Fanfeng Co., Ltd. announced that its grandson company, Yangzhou Jingying, established a wholly-owned company, Yueyang Jingying Photovoltaic Technology Co., Ltd., in Yueyang County with a registered capital of 50 million yuan. The business scope covers photovoltaic equipment manufacturing, sales, leasing, energy storage technology services, and solar power generation technology services.
With the above actions, Fanfeng Co., Ltd. stated in the performance forecast released on January 24 that it is expected to achieve a net profit of 60 million to 70 million yuan in 2023, an increase of 86.06% to 117.07% year-on-year. The main reason for this performance increase is that the profits of Suzhou Jingying Photovoltaic Technology Co., Ltd. from July to December were included in the consolidated statement; and the raw material prices have become stable, and the gross profit margin of the original tower-related business has increased.
In addition, Fan Jiangang and its concerted action persons also promised in the equity transfer agreement that from 2024 to 2026, the cumulative net profit of Fanfeng Co., Ltd. will not be less than 300 million yuan. If the actual net profit is lower than the promised amount but reaches 85%, there is no need for compensation; if it is lower than 85%, the difference must be made up in cash.
Tangshan State-owned Assets A-share MapIn recent years, local state-owned capital has been actively exploring regional industrial transformation through investment and even acquisition of new energy companies. Tangshan State-owned Capital is a typical example of this trend.
Tangshan City is located in the eastern part of Hebei Province and the northeastern part of the North China Plain. It is bordered by Qinhuangdao to the east, the Bohai Sea to the south, Tianjin to the west, and Chengde to the north. It is one of the central cities of Hebei Province, one of the core cities of the Beijing-Tianjin-Hebei urban agglomeration, and one of the central cities of the Bohai Rim Economic Circle.
As is well known, Tangshan boasts abundant coal mine resources and has long been a traditional industrial stronghold of Hebei Province. It not only has traditional pillar industries such as steel, coal, cement, and ceramics but also has expanded into emerging industries such as high-speed rail equipment, special robots, and ports.
According to incomplete statistics, Tangshan Control Industry Development and its controlling shareholders Tangshan Control Science and Innovation, as well as its indirect controlling shareholder Tangshan State Control, also own two listed platforms, Kangda New Materials and Sanyou Chemical, on the A-share market. In the Hong Kong stock market, they control Titan Energy Technology.
Kangda New Materials has been focusing on the research and development of butyl sealing materials in the photovoltaic field for more than ten years, with a formulation that is at the same generation of research and development level as foreign countries. The holding subsidiary, Wei Xin Technology, has ITO target materials that can be applied in the panel display industry, photovoltaic industry, and functional glass. In January, the company announced that Tangshan State-owned Capital intends to use centralized funds and multi-channel financing advantages to carry out centralized procurement and product sales that are beneficial to the company and its subsidiaries in the upstream material end.
One of the main products of Sanyou Chemical, soda ash, is an upstream raw material for photovoltaic glass. The company announced last year that the actual controller changed to Tangshan Municipal State-owned Assets Supervision and Administration Commission. In October of the same year, it announced a plan to invest 838 million yuan to build a project with an annual output of 2,500t/a of electronic-grade hydrochloric acid and other electronic chemicals in Tangshan; it will also promote the development of the electronic chip industry in the Beijing-Tianjin-Hebei region and create the largest electronic chemical industry park in the north.
Titan Energy Technology mainly researches and develops power electronics, automatic control, and software technology, forming a product series based on this, including direct current power, electric vehicle charging and swapping, energy storage, and electric energy quality management. At the end of 2023, the company announced that it would build a new energy industry cluster in the Caofeidian area of Tangshan, focusing on promoting the Caofeidian new energy equipment manufacturing project, laying out intelligent heavy truck charging and swapping stations at key nodes of the logistics system, and supporting the construction of upstream and downstream projects in the industry chain.
In addition, on March 2, 2023, the Envision Tangshan Zero Carbon Smart Industry Base and Leting Offshore Wind Turbine Equipment Manufacturing Project were officially signed, with a total investment of 510 million yuan. Both parties will jointly create a zero-carbon park covering the entire industrial chain of offshore wind power, including offshore wind power equipment manufacturing, energy storage equipment manufacturing, hydrogen ammonia industry, and smart IoT. The project started construction in November last year and is expected to be completed in the first half of 2024.
According to the "Tangshan Photovoltaic Power Generation Development Plan (2022-2035)" and the "Tangshan Photovoltaic Development Implementation Plan (2022-2025)", Tangshan City has proposed to create the largest photovoltaic component production base and intelligent operation and maintenance manufacturing base in the north, vigorously promote the gathering of the photovoltaic industry, increase the promotion and application efforts, organize and implement innovation-driven development, optimize the industrial layout, and accelerate the comprehensive development of the photovoltaic industry manufacturing industry.
In addition to new energy business, at the end of last year, Tangshan Cultural Tourism, a subsidiary of Tangshan Municipal State-owned Assets Supervision and Administration Commission, announced the signing of a share transfer agreement to enter the listed company Dason Culture. It is reported that Tangshan Cultural Tourism is a platform for investment in Tangshan's cultural tourism industry, with five major industrial sectors: cultural tourism, services, development, digital technology, and health.The process of local state-owned capital taking control of listed companies is not without challenges. How to achieve a deep integration of state-owned capital with listed companies in terms of system, culture, and management, promote the healthy and sustainable development of the company, and bring new investment opportunities and substantial returns to investors, remains to be observed in the future.