National unity Service hotline：
400-882-6908Recently, Beijing Semeureka Electrical Co., Ltd. (hereinafter referred to as “Semeureka”), a holding subsidiary of Far East Smarter Energy Co., Ltd. (hereinafter referred to as “Smarter Energy”, stock code: 600869), has signed an equity transfer agreement with the stockholders of Baoding Yiyuanda Electric Equipment Co., Ltd. (hereinafter referred to as “Yiyuanda”) and acquired 51% of the company’s share by RMB 51 million to extend the industrial chain of its power distribution network. Once the deal is completed, Yiyuanda will become a holding subsidiary of Semeureka and a sub-subsidiary of Smarter Energy.
Located in “Electricity Valley of China”- Baoding, Yiyuanda is only 60 odd kilometers away from Xiong’an New Area. It is a medium-sized company with over a decade of professional transformers manufacturing experience. Its main products include dry-type, oil-immersed and amorphous alloy power transformers as well as power distribution products such as box-type substations, ring main units and switch cabinets. The company is a qualified supplier of State Grid with “Proof Letter of Qualification of Suppliers Selected through Centralized Bidding by State Grid”. Currently, Yiyuanda mainly serves as a supplier of State Grid, municipal electric power companies as well as some steel, photovoltaic, wind power, oil and petrochemical enterprises and exports its products to Jordan. In recent years, Yiyuanda has seen gradual expansion of its market coverage and a stable increase of its market share. It has completed multiple orders at RMB 10 million especially for the key projects like photovoltaic and wind power box-type substations, winning consistent public praise. Looking into the future, the previous shareholders of Yiyuanda have promised to respectively achieve a net income of RMB 10 million, 12 million and 15 million for 2017, 2018 and 2019; besides, Semeureka has promised to respectively bring Yiyuanda an order income of more than RMB 50 million, 100 million and 150 million for the three years, to contribute an average annual net income of over RMB 20 million to Smarter Energy (stock code: 600869 at Shanghai Stock Exchange) in the following three years.
State Grid initiated in 2016 the bid invitation for “Power Distribution Station and Transformer Substation Integration” (commonly known as “integrated station”), which includes construction or transformation of power distribution networks (both urban and rural networks included) and requires that the bid enterprises should have transformer manufacturing qualifications and can purchase products except transformers like box-type substations and fault indicators. Semeureka, through acquisition of Yiyuanda, a beneficial partner of State Grid, will own the supply qualification of equipment kits such as integrated stations and integrated switches, which will drastically improve the chance of the company winning the bid of State Grid. Besides, China’s RMB 700 billion investment on its rural power grid is to be completed within the following two years and the upgrade and transformation plan for the benefited rural power grids is being carried out, which means a drastically increased demand for related equipment, especially for transformers, JP cabinets (power distribution and transformer integrated cabinets) and column switches, etc.
Semeureka has got the capacity of manufacturing auxiliary products like column switches and JP cabinets. Acquisition of Yiyuanda is beneficial for the improvement of the company’s product system of primary and secondary power equipment, making synergistic effect, improving the company's overall competitiveness and building new profit growth points. It is learned from Semeureka that their product profit accounts for 20% the selling price of its equipment kit and that the gross profit rate is expected to reach 25% after acquisition of Yiyuanda.
The businesses of Smarter Energy now comprise energy project planning and design, product manufacturing, project implementation, operation maintenance and monitoring, energy efficiency management, turnkey project service, etc., covering the whole life circle of energy system construction and service and forming four business units- smart power products, power systems and storage equipment of new energy vehicles, clean/new energy systems and electrician and electric Internet platforms. In the future, the company will build a big global energy Internet platform closely around “strategic emerging industries” and continue to improve the smart energy system and ecological service system. This acquisition has targeted primary equipment manufacturing for power distribution network, which is in line with the strategic planning of Smarter Energy. Meanwhile, the company is hopeful to get involved in construction of overseas power distribution networks by the chance of the Belt and Road under the new bidding policies of State Grid.
