A-Share 100 Billion Giant Reappears Three Gorges Energy 20 Billion Fund Raising Bet On Offshore Wind Power

      On May 29, Wang wubin, Secretary of the Party committee and chairman of the Three Gorges energy group, Lei Mingshan, Secretary of the Party committee and chairman of the Three Gorges group, and Ji Zhenxiang, general manager of the Third Navigation Bureau of CCCC, sat together in the column of dialogue on May 29. The theme of their dialogue is the new Three Gorges on the sea.

        One of the questions in this dialogue is "how can offshore wind power achieve price friendliness?" In his reply, Wang wubin said frankly that 2021 is the last year of offshore wind power subsidies. Everyone is working hard and all kinds of resources are in short supply.

The "hard work" of nature also includes three gorges energy. After clearly implementing the strategy of "leader of offshore wind power", Three Gorges energy, with the support of capital, has heavily bet on offshore wind power.

On June 10, Wang wubin sounded the opening gong at the Shanghai Stock Exchange. On the first day of listing, the stock price of Three Gorges energy rose 44.15% to close at 3.82 yuan / share, with a market value of more than 100 billion yuan.

What attracts the attention of the outside world is that it has set the largest financing scale in the history of A-share power industry. The 21st century economic reporter noted that as of June 2, after the completion of the new share subscription work, the fund-raising amount of Three Gorges energy was set at 22.66 billion yuan. Although slightly lower than the previous expectations of 25 billion yuan, it does not hinder the new energy giant from making history.

According to the plan, Three Gorges energy plans to use part of the fund to supplement its working capital, and the rest will be invested in seven offshore wind power projects.

A battle for supremacy of offshore wind power has come.

"Scenery" giant AB side

There are two important time points in the history of Three Gorges energy: in 2015, the company was transformed into a limited company; In 2018, the reform of mixed ownership will be realized by increasing capital and shares. From the comprehensive management company of water conservancy project of Ministry of water resources in 1980 to the giant of new energy operation, the growth history of Three Gorges energy is also a history of fierce expansion and investment.

Public information shows that the main business of Three Gorges energy is wind power, photovoltaic and small and medium-sized hydropower. As of April 2021, the company's accumulated installed capacity has exceeded 16 million kilowatts and the asset scale has exceeded 150 billion yuan. Specific to the installed structure, the installed capacity of wind power, photovoltaic power and small and medium-sized hydropower in the Three Gorges project is 8.8 million kilowatts, 7 million kilowatts and 220 thousand kilowatts respectively. It can be seen that the company mainly relies on the investment, development and operation of wind power and photovoltaic projects.

More than half of the installed wind power has become one of the most significant energy labels in the Three Gorges Project. Among the nearly 8.8 million kilowatts of wind power installed by the company, the installed capacity of onshore wind power is about 7.5 million kilowatts, and the installed capacity of offshore wind power is about 1.3 million kilowatts.

It is worth mentioning that, backed by the Three Gorges group, there is still a considerable space for the growth of new energy installed capacity of Three Gorges energy in the future.

In January this year, Lei Mingshan said in an interview with the media that in the next five years, the goal put forward by the Three Gorges group is to achieve the level of 70-80 million kilowatts of new energy. This target is equivalent to quadrupling to five times the current level. As the main implementation platform of new energy business under the Three Gorges group, this goal also means that the installed capacity of new energy of Three Gorges energy is expected to increase significantly in the next five years.

In fact, in the past few years, Three Gorges energy has rapidly established its investment scale position in the domestic new energy field by increasing capital expenditure.

According to the prospectus, from 2017 to 2019, the company's major capital expenditure was RMB 6.891 billion, RMB 10.621 billion and RMB 14.275 billion, with a steady increase. According to TGP, the above capital expenditure is mainly used for investment and construction of offshore wind power, onshore wind power and photovoltaic projects. It is worth noting that the company did not slow down its investment during the outbreak.

According to the prospectus, in the first three quarters of 2020, the capital expenditure of Three Gorges energy reached 16.151 billion yuan, which has exceeded the whole year of 2019.

From the perspective of asset scale, the Three Gorges energy has indeed made "rapid progress" in the past two years.

In 2019, the company's total assets just exceeded 100 billion yuan. Last year alone, its total assets soared by 42.576 billion yuan. The 21st century economic reporter noticed that the net energy assets of the Three Gorges project did not achieve the same growth rate when the asset scale increased sharply.

In 2019 and 2020, the total assets of the company will increase by 17.59% and 42.55% respectively. Over the same period, the net assets of the company increased by - 3.43% and 11.37% respectively. The reason is related to the large-scale investment of Three Gorges energy in wind power and photovoltaic projects in recent two years, and the project income has not entered the release period.

According to the company's financial data, by the end of 2020, the scale of Three Gorges energy projects under construction was 31.230 billion yuan, an increase of 1.84 times in only one year. In the first quarter of this year, the figure dropped to 30.699 billion yuan, indicating that some projects are being completed in stages.

It is undeniable that the continuous investment in recent years has further increased the performance of Three Gorges energy. In the first quarter of this year, the company realized 3.812 billion yuan of operating revenue, with a year-on-year increase of 43.08%; The net profit attributable to shareholders of listed companies was 1.495 billion yuan, up 51.41% year on year. The gross profit margin of 64.51% has also reached the highest level in recent five years.

However, the sharp increase of accounts receivable has also become a business risk that can not be ignored by this "scenery" giant.

By the end of the first quarter of 2021, the accounts receivable of Three Gorges energy were about 13.922 billion yuan, a year-on-year increase of 25.33%, and accounted for 52.65% of the current assets in the same period.

According to the prospectus, the current accounts receivable of Three Gorges new energy are mainly composed of new energy subsidies.

The concerns about renewable energy subsidy recycling affect the investment enthusiasm of investors in different stock markets. Compared with the A-share market with high tolerance, Hong Kong stock investors are cautious about this issue, which is the main reason for the low valuation of Hong Kong new energy companies.

"New energy subsidies are not in place in time, which has become the main factor restricting the valuation of Hong Kong stock new energy companies. However, this problem is difficult to solve in a short period of time, leading to a vicious circle of undervalued and difficult refinancing of Hong Kong stock new energy companies. " A senior new energy industry analyst told the 21st century economic reporter.

The 21st century economic reporter noted that for subsidies, Three Gorges energy also indicated risks in its prospectus, "if the issuance of renewable energy subsidies continues to fail to be improved, the company's accounts receivable will not be recovered in time, which will affect the company's cash flow and adversely affect the company's production and operation."

Want to be the overlord of offshore wind power

What makes the outside world more controversial is that Three Gorges energy has invested more than 20 billion yuan in its offshore wind power projects in addition to the necessary working capital.

Offshore wind power accounts for only 8% of the total installed capacity of the company, which is far behind 47% of the onshore installed capacity. So, what about Three Gorges energy's insistence on expanding investment in offshore wind power projects?

Under the goal of carbon neutralization and carbon peaking, the national energy administration has made it clear that by the end of 2021, the proportion of domestic wind power and photovoltaic power generation will increase to about 11%. By 2030, the total installed capacity of domestic wind power photovoltaic will exceed 1.2 billion kilowatts. In October 2020, domestic wind power enterprises jointly issued the "Beijing Declaration on wind power", which proposed that in the "14th five year plan", wind power development space should be set in line with the carbon neutral national strategy: to ensure that the annual additional installed capacity of wind power is more than 50 million kilowatts, and after 2025, the annual additional installed capacity of wind power in China should not be less than 60 million kilowatts, and reach at least 800 million kilowatts by 2030, By 2060, it will reach at least 3 billion kilowatts.

The goal of carbon neutrality and the Beijing Declaration of wind power have opened up incremental space for the development of wind power market. However, in the past few years, due to the radical rhythm of onshore wind power project development, wind abandonment phenomenon is serious, land resources are reduced, and the incremental ceiling of onshore wind power is getting closer and closer.

Compared with onshore wind power projects, offshore wind power industry is entering the stage of large-scale development due to the stability of sea wind resources and high power generation. According to the research report released by CAITONG securities, at present, the economic advantages of offshore wind power have begun to highlight, and it is expected to relay onshore wind power and become a new engine for wind power development.

It should be noted that the change of subsidy policy also makes offshore wind power enter the countdown of "rush to install year". In January 2020, the Ministry of Finance issued several opinions on promoting the healthy development of non water renewable energy power generation, which clearly states that the newly added offshore wind power will no longer be included in the scope of the central financial subsidy, and those that have completed the approval (filing) according to the regulations and completed the grid connection of all units before December 31, 2021 will be included in the scope of the central financial subsidy. This shows that offshore wind power, which has enjoyed the state subsidy since 2014, will end the dividend of state subsidy this year.

Under the decline of subsidies, offshore wind power has become the competitive place of domestic wind power enterprises. With the end of onshore wind power rush installation in 2020, offshore wind power has become the focus of wind turbine manufacturers. According to statistics, Shanghai Electric, Mingyang intelligent, Jinfeng technology, Yuanyuan energy and other wind turbine manufacturers have a total wind power order of more than 10GW, and most of them will be delivered in this year.

According to the 21st century economic reporter's understanding, although the offshore wind power technology is increasingly mature, but compared with the onshore wind power, its economy has a certain gap.

At present, the cost reduction measures of offshore wind power mainly include large-scale wind turbine, control of back-end operation and maintenance cost, etc. However, facing the time limit of grid connection, offshore wind power, which has high cost, still has to face the problems of resource shortage and raw material price rising this year, which has affected the cost reduction process.

In the dialogue column, Wang wubin believes that the cost reduction effect of offshore wind power this year is not good, "however, we firmly believe that after this round of large-scale development of offshore wind power, the conditions on each industrial chain will be more mature. Preliminary estimates [offshore wind] parity is not going to be long. "

Public information shows that the Three Gorges energy and wind power project has abundant reserve resources. As of April this year, the company has acquired more than 30 million kilowatts of project resources. Among them, the 1.7 million kilowatt offshore wind power project in Yangjiang, Guangdong Province, attracts more attention.

      The project is planned for five phases, with 269 offshore wind turbines, which is the first "megawatt" offshore wind power base in China. It is worth mentioning that the two projects "Yangxi Shaba 300MW offshore wind power project" and "Yangxi Shaba phase II 400MW offshore wind power project" invested by Three Gorges energy this IPO are the components of the offshore wind power base. According to the investment plan, the total investment of the two projects exceeds 13 billion yuan.