Delayed the production date of fixed increase projects for four consecutive years Southern PowerAnnual report inquiry letter
Author: Wei Zhongyuan
The fixed increase investment project 6 years ago was postponed several times, and the “selling” profit turned losses in the first quarter. A number of unreasonable actions of Narada Power (300068.SZ) have attracted regulatory attention.
On May 9, the Shenzhen Stock Exchange issued an inquiry letter on the annual report to Narada, asking the company to explain whether the disposal of the two holding subsidiaries would adversely affect the production and operation of the listed company.
In January this year, Narada achieved an investment income of 420 million by disposing 21% of the equity of Jieshou Nandu Huayu Power Co., Ltd. (hereinafter referred to as “Nandu Huayu”) and Zhejiang Changxing Nandu Power Co., Ltd. Yuan. During the reporting period, the net profit of Narada Power after deduction was only 11.94 million yuan.
Acquisition does not achieve “sell”
In the first quarter of this year, Narada’s performance achieved a turnaround with “no sign”. The net profit attributable to the parent increased by 15 times year-on-year to 479 million yuan, while the net profit attributable to the parent after deduction was only 11.94 million yuan. The difference between the two is mainly due to The capital operation was “proper” – an investment income of 420 million yuan was recorded.
According to the announcement, on January 4, the shareholders meeting of Narada Power reviewed and approved the external disposal of 21% stakes in each of its holding subsidiaries, Narada Huayu and Changxing Nandu. The transferee was Yadea Holdings (01585.HK). After the disposal, the company holds 30% equity of Nandu Huayu and Changxing Nandu, loses control and will no longer be consolidated. Yadea Group will hold 70% of each of the two target companies and will be the controlling shareholder.
But “selling sons” was not Narada’s original plan. The first financial reporter sorted out the announcement and found that the original plan of Narada Power was to acquire the remaining equity of these two subsidiaries, and then form a 100% holding.
On October 25, 2021, Narada Power announced that it planned to acquire 49% of Nandu Huayu and Changxing Nandu at a price of 180 million yuan. After the transaction is completed, the two companies will become the company’s wholly-owned subsidiaries.
Four days later, Narada Power announced the termination of the acquisition. As for the reasons for terminating the acquisition, Narada Power said that the relevant value of the two target companies needs to be further evaluated.
As a result, these two subsidiaries became the “abandoned sons” of the capital operation of the listed company. On December 18, 2021, the “selling sub” announcement disclosed by Narada Power showed that the transaction prices of Nandu Huayu and Changxing Nandu were 93.45 million yuan and 00,000 yuan, respectively. As of November 30, 2021, the total value of the 100% equity valuation of the two target companies was 423 million yuan.
As a result, the equity disposal of the transaction consideration of 93.45 million yuan directly brought more than 400 million yuan of investment income to Narada Power, and promoted the turnaround of the first quarter performance.
It should be noted that since Narada Huayu will no longer be a holding subsidiary, the 208 million yuan guarantee provided by Narada Power has passively formed an external guarantee.
Both subsidiaries have been in the red since 2020. In 2020, the net profit of Nandu Huayu and Changxing Nandu lost 49.51 million yuan and 133 million yuan respectively. In 2021, the loss will intensify, and the net profits from discontinued operations attributable to the owners of the parent company of Nandu Huayu and Changxing South will be -109 million yuan and -136 million yuan respectively.
The Shenzhen Stock Exchange requires Narada to explain whether the composition and proportion of the company’s main production and operation business after the disposal will have a significant impact on the production and operation structure, and whether Narada Huayu and Changxing Nandu will compete with the remaining business of the listed company, which will be detrimental to the listed company’s business. Influence.
Delayed the implementation of fixed-increase projects for four consecutive years
At present, Narada Power is mainly engaged in the production and sales of lead battery products, lithium battery products and recycled lead products. In 2021, the company’s performance will continue to lose money, setting the largest annual loss in history.
During the reporting period, Narada achieved an operating income of 11.847 billion yuan, a year-on-year increase of 15.48%; the net profit attributable to the parent was 1.37 billion yuan, a year-on-year decrease of 387.46%; the net profit attributable to the parent after deduction was 1.292 billion yuan, a year-on-year decrease of 65.16%.
According to the announcement, in June 2016, Narada raised 2.45 billion yuan through fixed increase, of which 1.16 billion yuan was used for the new energy battery project with an annual output of 10 million kVAh. As of the end of 2021, the investment progress of the project was 74.73%.
According to the investment plan, the project should reach production by the end of 2019. From 2019 to 2021, Narada announced an announcement in April every year to extend the new energy battery project for another year. On April 29 this year, the “same script” continued to be staged. Narada Power said that due to further optimization of the design process route and adjustment of the production line layout, the specific plan is still being demonstrated and other reasons, the date of the project reaching the expected usable state will continue to be postponed until April 30, 2023.
The unreasonable move also attracted the attention of the Shenzhen Stock Exchange. The annual report inquiry letter requires Narada to explain the reasons and rationality of the multiple delays of the above-mentioned projects, whether the preliminary project planning is reasonable and prudent, the storage and use of the relevant raised funds, and whether there is any disguised misappropriation.
The aftermath of mergers and acquisitions is highlighted
Narada Power stated in its 2021 annual report that the transfer of the equity of the above two subsidiaries is to divest the original loss-making civilian lead-acid battery business, which will help the company to quickly recover funds, relieve existing capital pressure and reduce liabilities.
The financial report shows that in the past five years, the revenue of Narada Power has been gradually rising except for 2018. The net profit returned to the parent after deduction has entered a state of negative growth since 2017 and will continue until 2021, gradually declining from a profit of 266 million yuan in 2017 to a huge loss of 1.3 billion yuan in 2021.
From the financial point of view, Narada’s monetary funds are difficult to cover short-term debts, and the capital chain is tight. As of the end of 2021, the company’s monetary capital was 910 million yuan; short-term loans were 3.646 billion yuan, long-term loans due within one year were 597 million yuan, long-term loans were 760 million yuan, the total amount of interest-bearing liabilities was 5 billion yuan, and the asset-liability ratio was 70 %. In 2021, the interest expenses paid by Narada Power will be as high as 243 million yuan.
The financial and performance problems of Narada Power can be mainly attributed to the “burying mines” of mergers and acquisitions. Wind data shows that from 2015 to 2017, Narada Power acquired 100% of the equity of Anhui Huabo Renewable Resources Technology Co., Ltd. (hereinafter referred to as “Huabo Technology”) at a total transaction price of 2.276 billion yuan.
In 2016, Narada invested 30 million yuan in Changchun Konghui Automobile Technology Co., Ltd.; in January 2017, the company increased its own capital with 281 million yuan to participate in Beijing Zhixing Hongyuan Automobile Co., Ltd. (hereinafter referred to as “Zhixing Hongyuan”). ), and then further increased its holdings and became the largest shareholder of Zhixing Hongyuan.
After a series of mergers and acquisitions, the acquisition targets such as Huabo Technology and Zhixing Hongyuan did not achieve the corresponding performance expectations.
Taking Zhixing Hongyuan as an example, from 2017 to 2019, the company’s total loss of non-net profit after deduction was 196 million yuan, which was far from meeting its performance commitment, which became one of the reasons for Narada’s 2020 performance loss.
As of the end of 2021, the balance of goodwill formed by Narada’s acquisition of Huabo Technology was 232 million yuan, and a new provision for goodwill impairment of 32.5447 million yuan was made in 2021, and no goodwill impairment was made in 2020.
In this regard, the Shenzhen Stock Exchange requires Narada Power to explain whether the key parameters selected for the 2021 goodwill impairment test are reasonable and whether the impairment provision is sufficient in combination with Huabo Technology’s operating performance, industry development, and changes in market competitiveness in the past three years.
Massive information, accurate interpretation, all in Sina Finance APP
Responsible editor: Chen Cheng