Bo Tian fights again in the world: why is Zhonghui the receiving party after 300 days breakthrough?

category:Finance
 Bo Tian fights again in the world: why is Zhonghui the receiving party after 300 days breakthrough?


Now I need to settle down and spend more energy to return to the business and management of the company. At 3 p.m. on July 28, 2020, Zhao Lijun told the Economic Observer in a small reception room of poten Environment Group Co., Ltd. (hereinafter referred to as poten environment or poten, 603603. SH).

Compared with his exclusive interview with a reporter a year ago, he still looks energetic and runs at high speed every day.

Zhao Lijun regarded the crisis as a microcosm of the ups and downs experienced by poten since its establishment 25 years ago. In fact, in the past 25 years, poten has faced more than one life and death test. Whether it is brought about by changes in the external environment, or when we grow to a certain stage, the outbreak of accumulation problems is quite normal. In the past, we had to bear the burden. But now poten is a public company, and the difficulties and problems will be disclosed and even magnified.

From the listing of the company to the emergence of liquidity tension, and then to the introduction of state-owned assets for mixed reform, Zhao Lijun also reflected on the problems in the whole process, such as the aggressive enterprise strategy when the financial environment was loose. However, there are also some problems that can not be solved through individual reflection of business owners, such as the difference of loan interest rates between state-owned enterprises and private enterprises.

The crisis ridden poten introduced the state-owned assets war investment twists and turns, can this time highlight the encirclement? There are many conjectures.

Until July this year, there will be a turnaround. In the near future, the actual control of poten will be transferred to a state-owned asset platform: Zhongshan Zhonghui group, which will become another case of mixed ownership reform in the environmental protection industry.

This may be Zhao Lijuns new post in Bo Tian.

Break through 300 days

Since last year, poten has experienced more than 300 days of breakout.

At the beginning of 2020, an insider of poten once described to reporters the plight of poten at that time with the words life and death at stake. In 2019, poten environment realized a net profit of - 720 million yuan, a year-on-year decrease of 489.74%. The profit was 185 million yuan in the same period of last year. In 2019, the net cash flow from operating activities was 460 million yuan, with a year-on-year increase of 45.47%.

However, it is always unknown who to choose, who to accept and what conditions to cooperate. However, in Xue Taos opinion, it can be expected that poten will introduce state-owned assets. After all, poten is an excellent and even the most leading company in the field of industrial wastewater treatment.

Moreover, from the perspective of the whole industry, only three non-state-owned holding companies remain in the top 25 environmental protection companies (Yingfeng environment, Lingnan shares and poten environment), of which the top two are Guangdong enterprises. Therefore, from the perspective of supply, there are not many alternative opportunities for mixed reform. In the future, if environmental protection companies want to get more opportunities, the market-oriented challenges will be more and more big.

Therefore, there are a lot of central enterprises and state-owned enterprises looking for us. Poten itself is also a scarce resource for them. They prefer to purchase such listed companies as poten with larger income and technology accumulation. And when the stock market fell lower, it was a time when asset values were low. Zhao Lijun told the economic observer that since the second half of last year, many central enterprises and state-owned enterprises have come to visit. Although various schemes have been discussed, as the major shareholders are still in the sales restriction period, they can not get around the issue of controlling shareholders equity restrictions. If some central enterprises have other goals, they will choose new opportunities.

Some local state-owned assets platforms have also invested olive branches.

State owned assets in Shandong, Guangdong, Jiangsu, Guangxi and Hubei are all options for poten. These areas are not only provinces with large economic aggregate, but also provinces with complex environmental pollution structure and strong demand for treatment.

There are six or seven local state-owned enterprises that have visited us, and several in Shandong alone. Zhao Lijun told the economic observer that under the layout of environmental industries related to the water industry, poten maintains the dual wheel drive of industry and municipal administration, especially in industrial water treatment. Local state-owned assets have capital advantages and have very realistic environmental governance needs. They also hope to establish a more friendly mechanism arrangement to better play and mobilize the enthusiasm of the team.

Zhao Lijun explained that in fact, we had earlier contact with Zhongshan, Guangdong Province, but in the process, Qingdaos state-owned assets were also more active, and several state-owned assets platforms in Shandong also visited us, hoping to make a decision. Poten also truthfully informed Qingdao rongkong that it was negotiating with other local state-owned assets. Therefore, the framework agreement signed with Qingdao is not binding.

It is a common choice for both sides to join hands with Zhongshan state-owned assets. In 2020, poten will usher in a major turning point. He said.

reflect

Why did poten, which had a market value of 20 billion yuan, go into such a situation? In the general environment, the environmental protection industry is suddenly cold in the capital market. At present, the overall situation is still at a low ebb, and the asset liability ratio and financial expense ratio are still on the rise. From 2017 to 2019, the asset liability ratio of poten environment is 78.01%, 79.97% and 87.4% respectively.

Zhao Lijun said frankly, in fact, all problems of poten point to the same problem, that is, lack of money. Before the green debt problem was exposed in October last year, poten had paid off 1.19 billion yuan of bank loans. Before that, it was withdrawn from loans one after another, reducing the liquidity of poten.

Some of our liquidity loans are invested in some long-term PPP projects. The business itself decides that the project capital is 20% and the loan is 80%. It takes time to repay. However, the deleveraging is too fierce. The boundary and scope of PPP projects are relatively complex. We have hundreds of millions of limited project funds in our account, but the project is slow to advance, and it is difficult to quickly return the funds. By the end of last year, we had more than 800 million cash in our account. One is the lack of money, the other is the cash can not be used He said.

Zhao Lijun introduced that the cost of state-owned financing is low even if there is no guarantee by issuing bonds through government platforms. However, for private enterprises, which are also government credit projects, there is a big difference in terms of loan terms and interest rates given by banks compared with those of central enterprises and state-owned enterprises due to ownership differences.

At that time, after the IPO, the management of poten sat down and held a weekly meeting to analyze the PPP mode rationally. Zhao Lijun thought that this was a toxic asset, and the environmental protection industry would probably experience a cliff. However, when potens team went to the market and looked around, it was almost all PPP business. It seemed that if it did not follow up, it would be very difficult to get an opportunity.

Its hard to find a balance between reason and reality. Because I got too many projects at that time, which magnified the leverage. But if you cant get the project, youre also facing survival problems. In Zhao Lijuns opinion, it is difficult to judge right and wrong. It can only be said that in the process of enterprise growth and evolution, it is necessary to experience.

So we dont complain. Its just that the environment we live in and the industrys pattern in the past is like this. In the future, we will not only have the original rational analysis, but also have painful lessons, which will become our wisdom. Zhao Lijun said that the poten team has realized the value of pursuing more quality growth and attached more importance to the building of the companys core competitiveness rather than following the trend in the market opportunities.

Zhao Lijun thinks that this is a two-way choice. Private enterprises need the support of state-owned assets, and state-owned enterprises hope to bring in the genetic mechanism of private enterprises and extend the business chain through equity structure adjustment. However, in the process of integration of different ownership systems, there will be some incompatibility with each other, which is normal.

In this round of mixed reform, the systematic risk management of state-owned enterprises will restrict the rapid and irrational development of private enterprises in the past. Private enterprises also need to look at the advantages and disadvantages of different ownership systems more rationally. Dont change the mix into a collection, or it will be difficult to create a new and more vigorous and creative elite enterprise. He said.

In the course of the war, many state-owned assets were within the scope of potens option, and poten was also observing the efficiency of all parties and the rationality of the scheme.

But why did it end up in Guangdong?

In fact, Guangdong has more advantages in the concept of mixed reform, the efficiency of resource allocation and the rationality of the scheme, and the progress is faster. Zhao Lijuns experience is that, from the beginning, Guangdong is relatively mature and rigorous in all aspects of procedures, and the overall business environment and understanding of private enterprises are in line with potens value pursuit. Indeed, Guangdong has formed a new highland of environmental industry.

Zhonghui group was established in August 2007 with a registered capital of 2 billion yuan. It is a wholly state-owned enterprise group established by Zhongshan municipal Party committee and municipal government through major asset restructuring and overall listing of the former Zhongshan public utility group. By the end of 2019, the total assets of Zhonghui group were 22.167 billion yuan, the net assets were 16.081 billion yuan, and the asset liability ratio was 27.45%. In the past three years (2017-2019), its financial indicators have increased steadily, with an accumulated revenue of 6.475 billion yuan and a net profit (belonging to the municipal government) of 1.165 billion yuan.

Zhonghui group is the largest shareholder of Zhongshan public utility, accounting for 48.29% of the shares. Zhongshan public company itself is engaged in water treatment. Previously, it mainly served water projects in Zhongshan, and 90% of its business income came from Zhongshan.

From the beginning, Zhonghui was very clear about the environmental protection industry and market. It saw that the industrial chain of water was longer, and that poten maintained two wheel drive in the industrial and municipal fields. It also understands that at present, domestic environmental water companies have limitations to varying degrees, some of which are strong in municipal administration and weak in industry. Zhonghui has Zhongshan public utility and poten. If it is further integrated in the future, it is likely to become a company with good industrial and municipal layout like Veolia and Suez. Zhao Lijun preached.

The choice must be mutual. Many central and state-owned enterprises come to visit poten, but we dont have a deep discussion with each one. What Zhongshan state-owned assets see is the value behind the problem. He thinks that poten is a company with strong resource carrying capacity, and has a team capable of enlisting and fighting well. He sees the ability of poten to start again after the support of state-owned assets and the value of returning to the battlefield. So on balance, we think this is the best choice. Zhao Lijun told reporters. Next, poten will carry out the next step of cooperation with Zhongshan state owned assets. Zhao Lijun said, we still have a lot of confidence expectations for each other. The plans of poten and Zhonghui include fixed increase arrangements. The completion of the fixed increase can supplement 800 million yuan for listed companies and reduce the asset liability ratio. We are also in the process of recovering funds through disposal of assets to ease the capital pressure. In the second half of this year, potens business will have some strategic adjustments. Zhao Lijun said that poten will focus on the emission control and resource recycling of industries and industrial parks. In terms of urban water environment, poten will position its technology solutions and asset light operation mode of construction management, and the part of heavy assets investment is likely to be invested through Zhonghui and Zhongshan public utilities. Source: Guo Chenqi, editor in charge of the Economic Observer_ NBJ9931

The choice must be mutual. Many central and state-owned enterprises come to visit poten, but we dont have a deep discussion with each one. What Zhongshan state-owned assets see is the value behind the problem. He thinks that poten is a company with strong resource carrying capacity, and has a team capable of enlisting and fighting well. He sees the ability of poten to start again after the support of state-owned assets and the value of returning to the battlefield. So on balance, we think this is the best choice. Zhao Lijun told reporters.

Next, poten will carry out the next step of cooperation with Zhongshan state owned assets.

Zhao Lijun said, we still have a lot of confidence expectations for each other. The plans of poten and Zhonghui include fixed increase arrangements. The completion of the fixed increase can supplement 800 million yuan for listed companies and reduce the asset liability ratio. We are also in the process of recovering funds through disposal of assets to ease the capital pressure.