New financing idea: Request authorization to raise 300 million

On June 4 this year, Haidao Control announced that in order to improve the efficiency of the company’s equity financing decision-making, it requested the general meeting of shareholders to authorize the board of directors to issue shares to specific objects in a simple procedure (” fixed increase “), and the total proposed financing did not exceed 300 million yuan and did not exceed 20% of the net assets at the end of the latest year.

TB820-2V2 Hyde Control said that the use of the raised funds should comply with the provisions, including compliance with relevant policies and laws and regulations; The raised funds may not be used for holding financial investment, and may not be invested directly or indirectly in companies whose main business is trading in securities.

The last round of fixed increase plan was not successfully implemented, and now they want to raise funds. A clue can be found in asset-liability ratios and short-term debt service indicators.

From the financial report, from 2021 to 2023, the current ratio controlled by Hyde decreased from 1.746 to 1.451, the quick ratio decreased from 1.472 to 1.086, and the short-term debt repayment index value showed a downward trend.

Another set of data shows that by the end of 2023, the asset-liability ratio controlled by Haide was 60.26%, an increase of 9.78 percentage points year-on-year (the industry average asset-liability ratio was 28.02% during the same period), hitting a new high since 2015. In detail, since the third quarter of last year, the asset-liability ratio controlled by Haide has exceeded 60%.

In the first quarter of this year, the asset-liability ratio controlled by Haide was 58.54%, an increase of 8.77 percentage points year-on-year. During the same period, the industry’s average asset-liability ratio was 28.44%.

It is worth noting that Haide Control responded to investor questions, saying that the growth of the company’s asset-liability ratio in the third quarter was mainly due to the rapid expansion of new energy storage business.

TB820-2V2 It is understood that the proportion of new energy business revenue controlled by Hyder rose from 11.47% in 2021 to 40.77% in 2023, and the total proportion of the three-year period increased by 29.3 percentage points.

Hyde Control believes that new energy and AI are the main track for future global and domestic economic development. In addition, the company has established a strategy of taking smart manufacturing as the main body and digitization and green as the two wings of business development.

We are also concerned that betting on new energy businesses has made Hydecontrol suffer from profitability “pains” in the short term.

In 2023, Hyde-Control achieved revenue of 3.552 billion yuan, an increase of 31.27%; Net profit attributable to 117.3 million, down 17.20% year-on-year. Hyde explained that one reason is that the necessary investment in the new energy business, especially the energy storage business, has affected the company’s overall profit realization.

In the first quarter of 2024, Hyde achieved revenue of 477.8 million yuan, down 21.61% year-on-year; Attributable net profit loss of 12.29 million yuan, down 161.41% year-on-year. Hyde explained that one of the reasons is that the amount of new contracts in the new energy business increased year-on-year, but the project delivery and settlement were less than expected.

We will continue to observe when Hyde will release the new fixed increase plan in the future and whether it can land smoothly.