Huitong shares enters into the real estate industry with Yutong group as the related party

category:Finance
 Huitong shares enters into the real estate industry with Yutong group as the related party


On the same day, Huitong Energy announced that it plans to increase its business scope of real estate development and operation and other related businesses according to its business needs, and at the same time, it plans to establish Shanghai Lvjia Real Estate Co., Ltd. through joint investment with related parties and controlling shareholder Zhengzhou Lvdu Real Estate Group Co., Ltd. in cash.

Huitong Energy said that in 2019, it will stop trading business, divest wind power business, acquire 100% equity of Zhengzhou Lvdu Business Management Co., Ltd., a subsidiary of Lvdu group, and change its main business income to house rental income and property service income, which will improve its profitability. In 2019, Huitong energy house rental income and property management income (excluding green capital business) totaled 45.6819 million yuan, an increase of 8.3358 million yuan or 22.32% year-on-year; net profit totaled 18.4214 million yuan, an increase of 626100 yuan or 3.58% year-on-year.

It is worth mentioning that Tang Yuxiang, the actual controller of Lvdu group, is also one of the major shareholders and controllers of Zhengzhou Yutong Group Co., Ltd. (Yutong Bus, 600066. SH). At the end of 2018, almost at the same time of purchasing Huitong energy, Yutong group purchased another listed company Xian Hongsheng Technology Development Co., Ltd. (st Hongsheng, 600817. SH) with 1 billion yuan.

With a building area of more than 80000 square meters in Shanghai

According to the announcement, at present, Huitong energys real estate properties in urban core areas, such as Jingan and Huangpu, are mainly used for office and commercial operation, with high rental rate, and the rent reaching or slightly higher than the average level of the surrounding areas; the companys main projects in key urban renewal areas, such as some projects in Hongkou and Yangpu, have been relocated and transformed according to the adjustment of regional planning, and have been put into operation successively In Pudong New Area, Minhang, Baoshan and other places with economic transformation and industrial upgrading, the company has a large number of vacant projects.

In 2020, the novel coronavirus pneumonia epidemic which was sustained by the beginning of the year, the domestic economy resumed its business postponed, and the business operation generally faced some difficulties and pressures. Huitong energy is expected to face greater pressure and difficulties. In 2020, the company will promote the transformation project of the Creative Industry Park, build a distinctive creative office park, complete the transformation project of the creative office park of the old factory buildings such as Beizhai road and Zhenda road according to the plan, expand the business area of the creative office park, fully tap the business potential and profitability of the companys idle assets, and expand the scale of business income; promote the Xingyuan and Jiangjiang that have been put into use The transformation and upgrading of creative office parks and other office properties, such as park, Dechang Park, etc., will expand the channels of leasing information release, upgrade the supporting facilities of the property, and improve the quality of property services, so as to reduce the vacancy rate in the economic downturn, ensure that the unit rent level of the park does not decline or decline, and ensure the profitability of the company.

Most of the land and real estate held by Huitong energy are acquired relatively early, with low acquisition cost and strong anti risk ability. Most of them are located in the downtown area of Shanghai. The administrative areas where the rental building area of the real estate leasing project exceeds 10000 square meters are Jingan District, Hongkou District and Baoshan District.

In 2019, the company has been included in the collection scope of No. 907, dongyuhang Road, Hongkou District, No. 297, Zhongxing Road, Jingan District, No. 315, No. 3a, Zhongxing Road and No. 583, Pingliang Road, Yangpu District.

Huitong Energy said that its real estate management team is responsible for the real estate management and operation of the company, and at the same time, it plans and positions the vacant real estate and factory buildings held by the company, and puts forward business plans according to local conditions. In addition, the company is also actively trying to obtain the right to use the property and the right to income through leasing. Moreover, the companys own land, real estate and other property renovation investment cost is controllable, the ability of sustainable operation is strong, and can contribute to stable operating cash flow. The rental pricing of self owned property has certain market competitiveness, which is conducive to maintaining the stability and common sustainable development of tenants.

In the housing leasing industry, there are three main types of business operation with self-supporting industrial plants: first, the self operation mode of self decoration and transformation management; second, the cooperation mode of the house holder and the specialized company engaged in urban old transformation business to cooperate in the reconstruction and operation of old projects; third, the lease of the property directly rented out and reconstructed and expanded by the lessee Mode.

Huitong Energy said that at present, the company mainly adopts the self operating mode and actively expands and takes into account other business models, expands its business scope and improves its business performance. In the companys self operating mode, the property is mainly used for office property, while the rental mode is rich in use, mainly including office, business and storage.

By the end of 2019, the total scale of Huitong energys available bank deposits and short-term realizable bank breakeven financing is 584 million yuan, mainly due to the companys sale of assets with low yield, recovery of receivables, increase of cash flow from housing lease operation, etc. The company said that reducing unnecessary investment and expenditure can maintain sufficient book cash flow and support the companys future strategic adjustment and new business transformation.

The actual controller of Lvdu group is one of the controllers of Zhengzhou Yutong group

According to Huitong energy announcement, Lvdu group is its indirect controlling shareholder, which belongs to related party, legal representative is Yang Zhangfeng, and actual controller is Tang Yuxiang.

Based on the adjustment plan for the future development strategy and the decision to increase the scope of real estate development and business, in order to give full play to the financial resources and business management advantages of Lvdu group, a related party, in the field of real estate development, Huitong energy and Lvdu group plan to jointly invest and establish Shanghai Lvjia Real Estate Co., Ltd. by means of cash investment.

Lvdu group was founded on August 20, 2002, mainly engaged in real estate development and operation, construction, property services and other businesses. As of December 31, 2019, Lvdu group has total assets of RMB 42.509 billion, net assets of RMB 8.157 billion, operating revenue of RMB 7.739 billion and net profit of RMB 547 million in 2019.

Previously, in April 2019, Huitong energy acquired 100% equity of Lvdu business, a wholly-owned subsidiary of Lvdu group, with a transaction price of 6.209 million yuan.

In fact, the intersection of Huitong energy and Lvdu group started at least in 2018.

Hongchangsheng group transferred 44203000 shares (29.9999% of the total share capital of the listed company) to Tibet Dejin with the price of 899959157 million yuan. The price of each share is about 20.36 yuan / share, which is a large premium over the secondary market price of 9.73 yuan / share. Tibet Dejin has transferred these shares and become the controlling shareholder of Huitong energy. Lvdu group holds 45.95% of Tibet Dejin.

It is worth mentioning that Tang Yuxiang holds 33.10% of the shares of Lvdu group and controls 55.86% of the shares of Dejin in Tibet, both of which are actual controllers. At the same time, Tang Yuxiang, Niu Bo, Zhang Baofeng, Yang Zhangfeng, Wang Jianjun, you Mingshi and Xie Qunpeng, seven partners, as shareholders, respectively hold 46%, 8%, 8%, 8%, 8%, 8%, 14% and 8% equity of the management company Zhengzhou Tongtai Hezhi Management Consulting Co., Ltd. and indirectly control Zhengzhou Yutong Group Co., Ltd. (Yutong Bus, 600066. SH) by controlling Tongtai Zhihe enterprise management center. In other words, Tang Yuxiang is not only a legal person of Yutong group, but also a major shareholder of Yutong group. Meanwhile, Yutong group controls 100% of Tibet Deheng Enterprise Management Co., Ltd.

On December 7, 2018, Huaxia Xingfu foundation Co., Ltd. (Huaxia Xingfu, 600340. SH) actually controlled Wang Wenxue and transferred 25.88% of the shares of Xian Hongsheng Technology Development Co., Ltd. (st Hongsheng, 600817. SH) in its hands to Yutong group with a total of 1 billion yuan.

At the end of 2018, Shanghai Stock Exchange asked Huitong energy about the main considerations for the relevant parties to acquire several listed companies in a short period of time.

On January 2, 2019, Huitong Energy said that Tibet Dejins acquisition of Huitong energy was based on the publicly disclosed information and combined with comprehensive factors such as clear main business, good sustainable profitability, high asset quality, good corporate governance and compliance operation, and reasonable ownership structure of major shareholders when the value of a shares was underestimated Investment judgment made after considering the transaction demands of both parties. Tibet Dejin is optimistic about the long-term development of Chinas capital market and recognizes the long-term investment value of the proposed acquisition of listed companies. Tibet Dejins acquisition of Huitong energy control right aims to further improve the operation of listed companies, continuously optimize the resource allocation and business structure of listed companies, maintain the stability of the control right of listed companies, and comprehensively improve the sustainable operation ability of listed companies.

Tibet Dejin and Tibet Deheng have different ownership structure, actual controllers and decision-making mechanisms. Their acquisition of listed companies is an independent decision based on their own business development, strategic planning and market research.

It has sold over 70% of its net assets to develop the wind power industry, mainly the real estate it owns

It can be said that the transformation to real estate industry is the decision of Huitong energy after many attempts.

Huitong energy was formerly Shanghai Light Industry Machinery Co., Ltd. (Light Industry Machinery). Light industry machinery was approved by Shanghai Municipal Peoples Government in December 1991, Founded in 1956, Shanghai Light Industry Machinery Co., Ltd. was reorganized and set up. It was listed in March 1992. Its products include all kinds of plastic machinery, rubber machinery, pharmaceutical machinery and beverage, tomato sauce, biscuit, soap, toothpaste, battery, ink, medical disposable syringe production line and other complete equipment.

The original machinery manufacturing industry of light industry machinery has been declining year after year due to historical burden and fierce market competition. In 2006, Shanghai hongchangsheng Group Co., Ltd., which owns wind farm resources, became the controlling shareholder during the share reform of light industry machinery. On September 6, 2007, light industry machinery changed its name to Huitong energy, taking wind power industry as the first major business.

Obviously, the transformation to new energy enterprises is not easy. The initial investment in the construction of wind power projects is particularly large. An imported wind power generation unit needs about 80 million yuan, while a domestic one also needs 40-50 million yuan. Huitong energy can only continuously replace its real estate resources to develop the wind power industry.

Since August 2007, Huitong energy has sold its real estate and subsidiary equity through a series of transactions, with a net amount of 93.596 million yuan. In December 2007, Huitong energy purchased 100% equity of Inner Mongolia Huitong energy from donghongchangsheng group and its subsidiaries, with a transfer price of 99 million yuan. The main assets of Inner Mongolia Huitong Energy Co., Ltd. are 49.5mw wind power concession of Bayin Xile wind power plant (phase I) in Zhuozi County, Wulanchabu city and 1000MW wind power plant survey right of Siziwang Banner, with a total of 400 square kilometers of wind power plant resources and a commercial land. After the completion of Bayin Xile wind farm (phase I), the actual capacity is 48MW, and grid connected power generation began in April 2011.

On July 17, 2008, Huitong energy transferred 100% of its equity in Shanghai Nanchang Real Estate Co., Ltd. to Lianyungang Zhigao Municipal Engineering Co., Ltd., with a net equity of 84.2132 million yuan.

Only one year after the name change, Huitong energy sold about 180 million yuan of assets, accounting for 73.47% of the net assets at the end of 2006.

On September 28, 2012, Huitong energy transferred the property of its first chemical machinery factory located in lane 661, Wanhangdu Road, Jingan District, Shanghai to Caojiadu sub district office, with a total transaction amount of 9.98 million yuan.

On December 29, 2012, Huitong energy sold 4 vacant residential houses located at No. 1, Lane 5115, Beizhai Road, Minhang District, Shanghai, with a total sale amount of 2.099 million yuan and a cumulative net profit of about 1.2 million yuan. Huitong Energy said the deal will help revitalize assets and replenish liquidity.

From July 2008 to March 2012, Zhongtai Trust Investment Co., Ltd., the second largest shareholder of Huitong energy, reduced its total shareholding from 30.57% to 2.715% through 9 times of reduction.

Failed in financing, tried to transform to cultural media and games

On the other hand, Huitong energy is also actively financing. In May 2012, it announced the refinancing plan and raised more than 400 million yuan, all of which were used to invest in the 49.5mw project of Huitong energy Zhuozi Bayin Xile wind farm phase II. Among them, hongchangsheng group plans to subscribe 32.83% of the issued shares.

However, due to many flaws in the connected transactions with major shareholders about wind power assets five years ago, and the major shareholders have related commitments that have not been disclosed publicly, on April 24, 2013, Huitong energys application for non-public issuance of a shares was not approved by the development and Audit Committee of the CSRC.

The IEC determined that Huitong energy purchased the wind resource survey right from the controlling shareholder hongchangsheng group at the price of 42.9296 million yuan in the above-mentioned connected transactions in December 2007. The wind resource survey right is only determined according to the agreement on wind measurement signed with wind power office of Siziwangqi government, and the legal basis is insufficient. The IEC also said that the purchase price of the above survey right is based on the appraisal value determined by the income present value method. The appraisal assumes that the annual transfer income in the first five years is 9 million yuan and in the sixth year is 9.6 million yuan, but it has not brought any income to Huitong energy.

The IECs veto also shows that Huitong energy has violated the rules on information disclosure. According to the 2012 annual report, hongchangsheng group and Zheng Shuchang, the actual controller, have only made a commitment to exclude peer competition and dividends from Huitong energy. The development and Audit Commission disclosed that hongchangsheng group also promised to make compensation to Huitong energy according to different situations if Huitong energys Bayin wind farm phase I project in Siziwang Banner of Inner Mongolia fails to obtain approval from relevant departments by December 31, 2017.

In 2014, Huitong energy purchased cultural media and game assets to try to restructure and change the runway again. In the end, Huitong energy terminated the major asset restructuring because it found that there were many links involved in the major asset restructuring and the implementation conditions of some links were not mature. Considering various factors comprehensively, Huitong energy terminated the major asset restructuring.

On December 18, 2014, Huitong energy sold the idle property again, and sold the right to use the House No. 4-6, Lane 951, dongyuhang Road, Hongkou District, Shanghai to beiwaitan property with a building area of 210.24 square meters and a net profit of about 2.5 million yuan.