Yangtze River Business Daily News ● Yangtze River Business Daily reporter Shen Yourong
After nearly three years, China Re Capital Environment (600217. SH) has finally landed.
On the evening of August 6, China Re disclosed the issuance of A-shares to specific objects, and the company's private placement has been completed, with 24 issuers, many of which are fund companies, and successfully raised 882 million yuan.
After deducting the issuance expenses, the fundraising will be used for projects such as the comprehensive utilization project (phase I) of waste electrical and electronic products of Shandong Zhonglv Resource Recycling Co., Ltd. and supplementary working capital, so as to further optimize the company's asset structure and enhance its financial strength and solvency.
The capital seems to be optimistic about the development prospects of China Re Capital Environment. At the end of the second quarter of this year, among the top ten shareholders of the company, two shareholders were new entrants, and two shareholders increased their holdings.
The business performance of China Re Capital Environment, which has grasped the opportunity of "two new", is also improving. According to the performance forecast, in the first half of this year, the company's net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") is expected to be 137 million yuan to 167 million yuan, a year-on-year increase of more than 10 times.
In recent years, the financial position of China Re Capital has continued to improve. As of the end of 2023, the company's debt-to-asset ratio was 65.37%. With the completion of this private placement, the company's asset-liability ratio is expected to further decline.
The private placement completed the subscription of Caitong Fund
The refinancing of China Re Capital has finally been completed.
This is a private placement fundraising that took nearly three years. On September 17, 2021, China Re disclosed its plan for a non-public issuance of A-shares. then The company's plan is to raise a total of no more than 948 million yuan, after deducting the issuance costs, the net use of the raised funds is 296 million yuan for Shandong Zhonglv Resources Recycling Co., Ltd. waste electrical and electronic products resource comprehensive utilization project (phase I), 204 million yuan for Tangshan China Renewable Resources Development Co., Ltd. waste electrical and electronic products dismantling equipment upgrading and non-motor vehicle recycling and dismantling project, 79.43 million yuan for Zhejiang Lantian waste household appliances recycling and processing Co., Ltd. to add an annual processing capacity of 1 million waste household appliances and intelligent transformation projects, 84.447 million yuan for warehousing and logistics automation intelligent technology transformation projects, 284 million yuan to supplement liquidity.
On May 10, 2022, after 8 months, the company received a feedback notice from the CSRC for the review of administrative licensing projects. In August 2023, the company was approved by the China Securities Regulatory Commission.
At present, the completion of the private placement of China Re Capital and Environmental has lasted nearly 35 months from the date of disclosure of the initial plan.
On the evening of August 6, the report on the issuance of A-shares to specific targets disclosed by China Re Zihuan showed that as of July 31, the private placement was completed, and the number of shares issued to specific objects was about 269 million shares, the lock-up period was 6 months, the issue price was 3.28 yuan per share, the total amount of funds raised was about 882 million yuan, and the net amount after deducting related expenses was about 872 million yuan.
The issuance target of this private placement is 24, and fund companies such as Nord Fund, Caitong Fund, and Industrial Securities Global participated in the subscription. Among them, the subscription amount of Nord Fund is 113 million yuan, which is the largest subscription amount. The subscription amount of Caitong Fund was 102 million yuan, ranking second.
In addition, Tianan Life Insurance, Huatai Asset Management, and Taikang Asset Management also participated in the subscription. Hubei Renewable Resources Group Co., Ltd., Sichuan Agricultural Production Materials Group Co., Ltd. and other companies have participated in the subscription.
Among the issuance targets, there are also three natural persons including Liu Jing, Zhang Yu, and Qian Shuigen.
It is worth mentioning that Liu Jing is one of the top ten shareholders of China Re Capital Ring. Wind data shows that at the end of the second quarter of 2024, Liu Jing appeared in the company's top ten shareholders list for the first time, holding 15.8574 million shares, with a shareholding ratio of 1.14%, ranking the ninth largest shareholder.
In addition, Hubei Renewable Resources Group Co., Ltd., which participated in the subscription, is also one of the top ten shareholders of China Re Capital Ring, and at the end of the second quarter of this year, it ranked as the tenth largest shareholder with a shareholding ratio of 0.89%. In the third quarter of 2021, Hubei Renewable Resources Group Co., Ltd. appeared in the list of the top ten shareholders of China Re Capital for the first time, and by the end of June this year, the number of shares held and the proportion of shares held by it remained unchanged.
The pre-profit in the second quarter was at least 130 million
The operating performance of China Re Capital Environment is significantly improving.
With the completion of this private placement, the 24 issuers who participated in the subscription have made significant floating profits. On August 6, the closing price of China Re Zihuan was 4.53 yuan per share, an increase of about 38.11% from its private placement price of 3.28 yuan per share. According to this calculation, the total floating profit of the 24 issuers is about 336 million yuan.
A welcome change is that the operating performance of China Re Capital has increased significantly.
According to the previously released performance forecast, in the first half of this year, China Re Zihuan is expected to achieve a net profit of 137 million to 167 million yuan, an increase of about 125 million to 155 million yuan year-on-year, an increase of 1036% to 1285%. The company expects to achieve a net profit after deducting non-recurring gains and losses (hereinafter referred to as "non-net profit") of 130 million to 160 million yuan, an increase of about 121 million to 151 million yuan year-on-year, an increase of 1379% to 1721%.
From the perspective of a single quarter, the performance of China Re Zihuan in the second quarter is very bright. In the first quarter of this year, the company's net profit and non-net profit were 3.5931 million yuan and 524,700 yuan respectively, a year-on-year increase of 147.58% and 105.94%.
According to the semi-annual performance forecast, in the second quarter, the company's net profit and non-net profit are expected to be about 133 million yuan - 163 million yuan and 129 million - 159 million yuan respectively. Compared with 19.6099 million yuan and 17.6134 million yuan in the same period of the previous year, it will increase by 580.03%-733.29% and 635.10%-805.40%.
Judging from the estimated net profit and non-net profit of China Re Capital in the second quarter, if the actual number is close to the upper limit of the estimated number, it is expected to hit a record high in a single quarter.
In view of the outstanding performance achieved in the first half of this year, China Re Zihuan explained that there are mainly four factors: first, take advantage of the "two new" (large-scale equipment renewal, consumer goods for new) trend, increase the depth of cooperation with supply and marketing cooperatives at all levels and home appliance stores and supermarkets, and improve the recycling network of waste household appliances at multiple levels. Second, the company continued to strengthen production and operation management, and year-on-year, the dismantling and processing volume of waste household appliances increased, and the proportion of high-value white electricity in the dismantling process increased. Third, the price of related commodities has risen, and the sales revenue of the company's unit of waste household appliances dismantling output has increased year-on-year. Fourth, the company took multiple measures to increase cost control, promote cost reduction and efficiency improvement, year-on-year, financial expenses decreased, some sales sub-expenses decreased, and the manufacturing cost of unit waste household appliances treatment decreased.
With the significant improvement in operating performance in the second quarter and the completion of this private placement, the financial situation of China Re Capital will improve significantly. As of the end of 2023, the company's debt-to-asset ratio was 65.37%, maintaining the level since the end of 2020. In that year, the company's financial expenses were 148 million yuan, a year-on-year decrease of 10 million yuan.