Wei Qiao Textile, The Largest Cotton Textile Manufacturer In China, Intends To Acquire 3 Billion 186 Million Thermoelectric Assets.

Recently, the largest in China.

Manufacturer Wei Qiao textile announced that the company intends to buy Zouping Changshan Industrial Company for 3 billion 186 million yuan.

That is to say, three sets of under construction and a set of generating units under commissioning will have a capacity of 1320 MW.

Wei Qiao textile said that due to the deepening of the reform of the electric power industry and the gradual opening of the electricity regulatory policy, the acquisition of the company at this time was mainly aimed at further developing the sale of electricity business, increasing the income from external sales and reducing the related costs of the company.

In the industry view, because of the textile industry demand downturn, the company's main business profitability decline, as well as self provided power plant low-priced electricity sales way can enhance profitability, so that Wei Qiao textile increased the revenue of the business accounted for, ease the textile business downturn brought to the company's performance pressure.

It is understood that the State Council issued in March 2015

It is clearly pointed out that the incremental distribution investment business should be liberalized step by step to the eligible market entities, and the distribution business will be encouraged by mixed ownership.

In addition, the eligible power generation enterprises should be allowed to invest and form the main body of the sale of electricity to enter the electricity market and engage in the sale of electricity business.

The positive earnings forecast issued by Wei Qiao textile showed that textile demand remained depressed, and value was affected.

The impact of textiles, domestic

In a downward trend, the price of domestic textiles has declined, leading to a continuous narrowing of the gross margin of the company's textile products.

Benefiting from the completion of the Wei Qiao textile industry in late 2014, the cost of power generation of the replacement power plant has dropped significantly, resulting in a substantial increase in the company's profit from the sale of electricity, thereby driving the annual growth of the company.

In addition, Wei Qiao textile in 2014 and the holding company Shandong Wei Qiao set up a thermoelectric asset replacement agreement, decided to spend about 4 billion 368 million yuan (about 5 billion 529 million Hong Kong dollars) to acquire the seventh power plant owned by Wei bridge in Shandong.