M&A Analysis and Research Report on Electric Power Industry of China

Abstract:

More investment has been put into the power industry in recent years. However, the expanding economy and great appetite for power have drive electricity supply to its limits and blackout has occurred in some areas. With number of new units put into work at the last four months in 2005, the electricity supply has witnessed a legendary turnaround by reducing electric shortfall in targeted area where, unfortunately, the power strain remained.

1. The driving forces behind M&A of electric power industry in China

The reshuffle and golden opportunity for this sector comes as the critical juncture when the systematic reform has been going on during the period of the 11 th Five-Year Plan.  The power companies have grown strongly under the driving policy of breaking down monopoly, introducing competitive culture to boost efficiency while holding down cost. The big five state-owned groups in power industry have managed to integrate and control the resources through listing on the stock market as to sharpen their edge to compete. The local power companies, moreover, have stayed focused on acquisition to stir their core competitiveness with expanding market share.

The analysis materials cast the light on inter and outer dynamics for ongoing surge in M&A among power firms.

First, the internal factors. There is a decentralized market share among more than 2000 power companies even the capacity installation and electric generation in the Big Five failed to move their share beyond 10%. The total market share of state-owned firms reached 97% or so while controllable capacity installation among private and foreign power sectors stands at 3%. The state has put a firm handle on power industry that is not open and the market is non-economical and free from centralized competition which deserves to harness all the available uses in this industry.

The operational performance being part of the problem. The big power companies want to land their feet firmly on this territory through M&A. Among other things, the China Huaneng Group's take-over towards North United Power made it forerunning its rivalries in this sector. Many medium-small companies want to grow stronger by M&A. Their improved management, open-ended opportunities, enlarged business scale and sharpened ability to compete have been achieved by bringing venture capital to solve financial insecurity and partnering with the companies with best performance.

2. Tendency analysis in M&A of power industry in China

Following economic expansion and large demand for power, the electric power industry has stepped in an accelerated phase of M&A. According to the analysis, number of things deserves attention. First, what has happened in the current market is that the major role was played by state-owned companies while private and foreign sectors share less than 20%. The other scenario is that the private and foreign sectors sought more roles as monopoly loosen from the state-owned firms. Second, the power industry tends to centralized as foregone conclusion extrapolated by 75% of companies are medium-small firms while predominant state-owned companies shot less than 10% of their capacity installation and electric generation among five big groups especially. In terms of future development, the total number of medium-small firms will reduce and the market share among state-owned firms will be expanded due to their strongpoint in financing seeking, project approval and laudable operation in five big companies. Many state-owned companies are engaging M&A in number of coal-mining industry by the privilege in hydropower and fire-power industry. By doing so, the operational cost will be trimmed down and help stabilize the price of raw materials, boost efficiency and transcend limits haunted current coal transportation industry. Third, the possibility is real in down-stream industry buying up-stream industry as to put brake on cost.

In the near turn, the M&A among power firms will be unfolding gradually. The drama is going on in wide array of forms among others, the take-over of central government towards local power firms, the consolidation among local companies, the acquisition of foreign capital to private sectors and from private sectors towards state-assets. The host of experienced companies with strong financial backup will stand a chance for industrial expansion. At that time, the electric power industry will enjoy a long-term development in a physically sound way.

Contents:

Chapter 1  Research Overview
Section 1   Background of the research
Section 2   Contents of the research
Section 3   Method over the research
Section 4   Team for the research
Section 5   Conclusion for research


Chapter 2  The status quo of electric power industry 
on world stage 
Section 1   The overall structure of electric power industry worldwide
Section 2   The status quo of electric power industry worldwide
1. The analysis over aggregate capacity installation in 
electric power industry worldwide 
2.  The analysis over the status quo of aggregate capacity 
installation in electric power industry worldwide
Section 3   The analysis of market demand Tendency in
 electric power industry worldwide
1. The analysis over status quo in electric power industry worldwide
2. The prospect analysis over market demand in electric power industry
Section 4  The status quo of electric power industry in U.S.A.
Section 5  The status quo of electric power industry in Japan


Chapter 3  The Analysis on Status Quo & Tendency in 
China¨s Electric Power Industry 
Section 1  The character of China¨s power industry now a days
1. The trait analysis of electric power industry in China
2. The trend analysis of electric power industry in China
Section 2  The market supply of electric power industry
1.  The analysis of aggregate capacity installation of power industry in China
2.  The structural analysis in capacity installation of power industry in China
Section 3  The analysis of electric power industry
1.  The analysis of demand scale in general within power industry 
2.  The analysis of production and demand character within power industry
Section 4  The forecast of demand and supply scale in electric 
industry in China


Chapter 4  The analysis of power generation and portfolios
Section1  The power generation by fire-power
1.  The analysis of industrial overview and characters
2.  The supply scale
Section 2  The power generation by hydropower
1.  The analysis of industrial overview and characters
  2.  The supply scale
Section 3  The power generation by nuclear power
1.  The analysis of industrial overview and characters
  2.  The supply scale 
Section 4  The power generation by wind power
1.  The analysis of industrial overview and characters
2.  The supply scale
Section 5  The power generation by solar power
1.  The analysis of industrial overview and characters
2.  The supply scale 
Section 6  The power generation by waste
1.  The analysis of industrial overview and characters
2.  The supply scale 


Chapter 5  The analysis of investment policy environment in China¨s electric power industry
Section 1  The impact of macro-economy towards 
investment in power industry
Section 2  The impact of industrial policy and other 
role over power generation 
Section3  The analysis of impact from the 11th Five Year 
Plan towards power generation

Chapter 6  The factor behind dynamics of electric power output
Section 1   The analysis of potential risks to power industry 
1.  Environmental protection
2.  Grid construction
3.  Natural resources
4.  Design & construction
Section 2  The problem in electric power industry

Chapter 7  The status quo and M&A trend analysis for electric 
power industry in regional development
Section 1  North-eastern region
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and 
structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry
Section 2  North China
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and 
structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry
Section 3  Central China
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and
 structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry
Section 4  Southern China
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and 
structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry
Section 5  South-western region
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and 
structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry
Section 6  North-western region
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and 
structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry
Section 7  Eastern China 
1. The analysis in power demand between 2007 and 2010
2. The analysis of characters over industrial development and 
structural layout in regional power industry
3. The analysis on situation of regional competition and the major player
4. M&A tendency and feasibility analysis in regional power industry

Chapter 8  The ongoing M&A in electric power industry of China
Section 1 Background analysis in M&A of China¨s electric power industry
Section 2  Analysis of status quo in M&A in China¨s electric power industry
Section 3 Case analysis in M&A in China¨s electric power industry
Section 4 Tendency analysis in M&A in China¨s electric power industry

Chapter 9   The analysis on potential blocks in China¨s electric power industry
Section 1   From policy perspective
Section 2   From capital side
Section 3   Engineering hurdles
Section 4   Resources strain

Chapter 10  Case analysis in M&A of power industry among foreign counterparts
Section 1  The take-over of Florida Power & Light
 Company to Constellation Energy Group Inc.
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 2  The YTLPower buying PT JAWA Power 
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 3  Singapore Power International buying Bugok United Recycling Plant 
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 4  Berkshire Hathawa buying PacifiCorp
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 5   Duke Energy Corporation buying subsidiaries of Dynergy
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 6  BG Group buying power plant in Connecticut
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 7  Iberdrola buying Scottish Power
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A
Section 8  Marubeni Corp. and Tokyo Electric Power Co. 
acquiring Mirant Asia Pacific
1. The analysis of motives behind M&A and its value
2. The analysis of M&A procedures
3. The analysis in method and lessons in M&A
4. The strategic analysis on M&A

Chapter 11  Trend analysis of M&A by foreign electric power generating firms in China 
Section 1  Industrial prospect analysis of foreign counterparts in China
1.  Character in investment
2.  Investment targets
3.  Market performance
4.  Structure of investment portfolio
5.  Investment tendency
Section 2  American Electric Power (AEP)
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 3  KEPCO Korea Electric Power Corp.
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 4  ABN Amro
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 5  DESAY Holdings Co.,Ltd.
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 6  Mirant Corp. 
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 7  Siemens Power Generation: Home
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 8  Constellation Energy Group Inc.
	1. Corporate investment in China
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate
Section 9  Kyushu Electric Power Company
1. Corporate investment in China	
2. The analysis of core competitiveness
3. The M&A tendency and feasibility analysis of the corporate

Chapter 12  The Analysis on Power Companies Moving into Chinese Market
Section 1  Shikoku Electric Power Co.,Inc
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies
Section 2  Singapore Power Ltd.
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies
Section 3  MERALCO Philippines
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies
Section 4  IBERDROLA Spain
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies
Section 5  Imatran Voima Oy Finland
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies
Section 6  Vattenfall AB, Sweden
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies
Section 7  Tenaga Nasional Berhad, Malaysia
1. The analysis on corporate performance
2. The analysis of core competitiveness
3. The Corporate background and motives for seeking Chinese market
4. The analysis of M&A trend and feasibility engaged by foreign companies

Chapter 13  Case study on M&A in domestic electric power  industry
Section 1  Zhejiang Southeast Electric Power Company 
Limited buying Xiaoshan Power 
1. The analysis of M&A motives and its value 
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A
Section  2   China Huaneng Group buying Jinggangshan Power Plant Operation
1. The analysis of M&A motives and its value
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A
Section 3  China Resources power Holdings Co., Ltd planning
 to buy Yunnan hydropower station
1. The analysis of M&A motives and its value
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A
Section 4  China Resources power Holdings Co., Ltd planning
 to buy Fuyang power plant
1. The analysis of M&A motives and its value
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A
Section 5  CCMP buying 70% of stock from Wuhan Kaidi Electric Power 
Environmental Protection Co., Ltd with RMB 0.28 billion
1. The analysis of M&A motives and its value
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A
Section 6  Hainan Power Company buying Yangpu Power Station
1. The analysis of M&A motives and its value
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A
Section 7  Chinapower International buying  Shentou I Power Plant
1. The analysis of M&A motives and its value
2. The analysis of M&A procedure
3. The solution and lessons from M&A
4. The strategic analysis of M&A

Chapter 14   The Major case analysis of M&A and core competitiveness in electric 
power industry of China.
Section 1  China Huaneng Group
1. The Corporate performance
2. The analysis on cutting-edge technology	
3. The analysis on plant grids
4. The strategic analysis of corporate
5. The analysis of M&A trend and feasibility 
Section 2  China Datang Corporation
1. The Corporate performance
2. The analysis on cutting-edge technology	
3. The analysis on plant grids
4. The strategic analysis of corporate
5. The analysis of M&A trend and feasibility
Section 3  China Huadian Corporation
1. The Corporate performance
2. The analysis on cutting-edge technology	
3. The analysis on plant grids
4. The strategic analysis of corporate
5. The analysis of M&A trend and feasibility
Section 4   China Guodian Corporation 
1. The Corporate performance
2. The analysis on cutting-edge technology	
3. The analysis on plant grids
4. The strategic analysis of corporate
5. The analysis of M&A trend and feasibility
Section 5  China Power Investment Corporation
1. The Corporate performance
2. The analysis on cutting-edge technology	
3. The analysis on plant grids
4. The strategic analysis of corporate
5. The analysis of M&A trend and feasibility

Chapter 15  Analysis of Industrial Chain and M&A in Electric Power Industry of China. 
Section 1  Analysis of character over industrial 
chain in electric power industry sector
Section 2  The case analysis on M&A of power 
companies towards up-stream firms
Section 3  The case analysis on M&A of power 
companies towards  down-stream firms

Chapter 16  The Analysis on Chances for Large-Scale 
Acquisition in Electric Power Industry of China
Section 1  The analysis on chances for M&A on electric power giants
1. Three Gorges Project
1.1 The performance of Capital operation
1.2 The analysis on cutting-edge technology	
1.3 The analysis on plant grids 
1.4 The strategic analysis on corporate development
1.5 The analysis on feasibility for M&A
1.6 The analysis on value of M&A
2. Xiluodu Hydroelectric Power Station
2.1 The performance of Capital operation
2.2 The analysis on cutting-edge technology
2.3 The analysis on plant grids
2.4 The strategic analysis on corporate development
2.5 The analysis on feasibility for M&A
2.6 The analysis on value of M&A
3. Waigaoqiao Power Plant
3.1 The performance of Capital operation
3.2 The analysis on cutting-edge technology
3.3 The analysis on plant grids
3.4 The strategic analysis on corporate development
3.5 The analysis on feasibility for M&A
3.6 The analysis on value of M&A 
4. Longtan Power Station
4.1 The performance of Capital operation
4.2 The analysis on cutting-edge technology
4.3 The analysis on plant grids
4.4 The strategic analysis on corporate development
4.5 The analysis on feasibility for M&A
4.6 The analysis on value of M&A
5. Zouxian Power Plant
5.1 The performance of Capital operation
5.2 The analysis on cutting-edge technology
5.3 The analysis on plant grids
5.4 The strategic analysis on corporate development
5.5 The analysis on feasibility for M&A
5.6 The analysis on value of M&A
6. Xiaowan Power Station
6.1 The performance of Capital operation
6.2 The analysis on cutting-edge technology	
6.3 The analysis on plant grids
6.4 The strategic analysis on corporate development
6.5 The analysis on feasibility for M&A
6.6 The analysis on value of M&A
7. Laxiwa Hydroelectric Power Station 
7.1 The performance of Capital operation
7.2 The analysis on cutting-edge technology	
7.3 The analysis on plant grids
7.4 The strategic analysis on corporate development
7.5 The analysis on feasibility for M&A
7.6 The analysis on value of M&A
Section 2 The analysis of chances for M&A among medium-small size companies
1.  Jinjie Energy Corporation
1.1 The performance of Capital operation
1.2 The analysis on cutting-edge technology
1.3 The analysis on plant grids
1.4 The strategic analysis on corporate development
1.5 The analysis on feasibility for M&A
2. Huadian Ningxia Lingwu Power
2.1 The performance of Capital operation
2.2 The analysis on cutting-edge technology
2.3 The analysis on plant grids
2.4 The strategic analysis on corporate development
2.5 The analysis on feasibility for M&A
3. Hegang Power Generation Company
3.1 The performance of Capital operation
3.2 The analysis on cutting-edge technology	
3.3 The analysis on plant grids
3.4 The strategic analysis on corporate development
3.5 The analysis on feasibility for M&A
4. Shantou Power Plant
4.1 The performance of Capital operation
4.2 The analysis on cutting-edge technology
4.3 The analysis on plant grids
4.4 The strategic analysis on corporate development
4.5 The analysis on feasibility for M&A
5.  Baosteel Self-Reliant Power Generation
5.1 The performance of Capital operation
5.2 The analysis on cutting-edge technology	
5.3 The analysis on plant grids
5.4 The strategic analysis on corporate development
5.5 The analysis on feasibility for M&A
6. Tianjin Dagang Power Plant
6.1 The performance of Capital operation
6.2 The analysis on cutting-edge technology	
6.3 The analysis on plant grids
6.4 The strategic analysis on corporate development
6.5 The analysis on feasibility for M&A
7. Hengshui Power Supply Corporation
7.1 The performance of Capital operation
7.2 The analysis on cutting-edge technology
7.3 The analysis on plant grids
7.4 The strategic analysis on corporate development
7.5 The analysis on feasibility for M&A
8. Shanxi Yangquan Second Power Plant
8.1 The performance of Capital operation
8.2 The analysis on cutting-edge technology	
8.3 The analysis on plant grids
8.4 The strategic analysis on corporate development
8.5 The analysis on feasibility for M&A
9. First Taiyuan Heating Power Company
9.1 The performance of Capital operation
9.2 The analysis on cutting-edge technology	
9.3 The analysis on plant grids
9.4 The strategic analysis on corporate development
9.5 The analysis on feasibility for M&A

Chapter 17  Risk Analysis on M&A in China¨s Electric Power Companies
Section 1  The analysis on M&A
Section 2  The analysis on resources crisis
Section 3  The analysis on corporate governance
Section 4  The analysis on design construction

Chapter 18  The Recommendation on M&A in China¨s Electric Power Industry

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