In the current era, new energy has become the sought-after avenue for many listed companies to explore new growth opportunities.
On November 20th, the listed company Gresgying Digital Energy Technology Co., Ltd., with total assets of only 11 billion yuan, announced its intention to invest in the construction of the “Xianyang Research and Manufacturing Base Project” in the Xianyang Economic and Technological Development Zone in Shaanxi. This initiative aims to propel the rapid development of the company’s electric charging station and energy storage businesses. However, with a total investment of up to 15 billion yuan for this project, can a company with assets of only 11.06 billion yuan, as of the end of the third quarter, bear such a substantial investment?
Gresgying, formerly known as Jiangquan Industry, had Zheng Yonggang, a capital tycoon, as its ultimate controller. After three unsuccessful attempts to plan shell sales, it fell into the hands of Xu Yiming, who acquired control through a judicial auction in 2019. Now, it is venturing into the field of new energy and aiming to divest traditional assets for rapid development.
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In the current booming era of new energy vehicles, the new energy track has become a highly competitive field, drawing numerous capital and companies, especially in the domain of charging stations and energy storage services for new energy vehicles.
Gresgying is now entering this arena with its ambitious plan to construct a production base in Xianyang with a total investment of 15 billion yuan. The first phase covers an area of 100 mu, with an investment of 7.5 billion yuan and a total construction area of 80,000 square meters, focusing on the production lines of battery packs, charging stations, energy storage systems, the headquarters of Gresgying Group, research and development headquarters, and supporting living quarters. The second phase covers an area of 100 mu, with an investment of 7.5 billion yuan and a total construction area of 85,000 square meters, focusing on the production lines of charging products and energy storage equipment.
According to the announcement, the construction period for this investment is 24 months, with the first phase taking 12 months. Gresgying states that the successful completion of this construction will drive the company’s rapid development in charging stations and energy storage services, enhancing its market competitiveness.
However, the market views Gresgying’s ability to undertake this 15-billion-yuan investment as a highly aggressive move. After all, as a company with only 11.06 billion yuan in total assets, the gap for an investment as high as 15 billion yuan is substantial. Moreover, the company’s total assets are not all in cash, with a cash flow of only 4.11 billion yuan, which also needs to be used for the company’s operational development.
So, where will the funds for such a significant investment come from? According to the announcement, Gresgying also warns of the risks, stating that the large investment in this project may impact the company’s cash flow, potentially increase financial risks, and the timely availability of funds is still uncertain. Additionally, other risks include fund raising and changes in credit policies, posing significant risks to the company’s financial stability.
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Gresgying has tasted success in the charging station and energy storage business and is unwilling to let go of this lucrative opportunity.
As a well-known shell company in the capital market, it underwent multiple transfers. In June 2015, Zheng Yonggang invested 5.93 billion yuan to acquire a 13.37% stake in Jiangquan Industry, gaining control. Despite attempting three consecutive shell sales, Zheng Yonggang, who had previously sold Medici to Shentong Express for substantial gains, faced failure each time.
With shell sales failing, the only option was to pass it on. In 2017, he transferred the shell for 10.6 billion yuan to Dasheng Group, incurring a significant loss. Dasheng Group, after taking over, restructured Jiangquan Industry, establishing multiple agricultural subsidiaries for strategic planning, but it did not meet expectations.
In 2019, due to poor management, Dasheng Group auctioned Jiangquan Industry, eventually secured by Xu Yiming’s controlled Jinghong Yicheng for 4.57 billion yuan. After Xu Yiming took control, he also restructured Jiangquan Industry, including board reorganization and divestment of agricultural assets.
Subsequently, pushing Jiangquan Industry towards the financial software market, it attempted to acquire a financial payment software company in late 2021 but abandoned the acquisition after two rounds of inquiries. By November 2021, planning a new merger and acquisition project, the target was Gresgying. At that time, a 90 million yuan investment secured a 100% stake, completing the acquisition in early 2022.
With the new company and business, it started divesting thermal power business assets and renamed the company Gresgying. Transitioning to the charging station and energy storage business, Gresgying’s performance has begun to rebound.
According to the financial reports for the first three quarters of this year, the company achieved a revenue of 5.12 billion yuan and a net profit attributable to shareholders of the listed company of 0.25 billion yuan, representing a year-on-year increase of 198.94% and 280.67%, respectively, successfully turning losses into gains. In the third quarter, operating income and net profit were 2.59 billion yuan and 0.21 billion yuan, with year-on-year growth of 389.81% and 265.36%, respectively.
Now, after witnessing some development in the energy storage and charging station businesses, Gresgying, which entered the industry relatively late, aims to grab a slice of the cake in an industry overshadowed by giants.