Central South Culture's "whale swallowing" with an annual revenue of 3 billion, "benchmark power plant" The targeted ongoing project is expected to double its capacity and performance by 2027

Zhongnan Culture (002445.SZ), which has been suspended for nearly a month, announced a major asset restructuring plan on the evening of the 8th. The plan aims to incorporate a large energy asset with annual revenue in the tens of billions and significantly larger scale than the company itself. This listed company, once known for its film and television culture business, has now formed business segments in manufacturing, media and culture, and new energy. The new strategic move could substantially change the company’s asset structure and business landscape.

According to the announcement, Zhongnan Culture plans to purchase a 57.30% stake in Jiangyin Sulong Thermal Power Co., Ltd. (referred to as “Sulong Thermal Power”) held by Jiangyin Electric Power Investment Co., Ltd. (“Electric Power Investment”) through issuing shares and paying cash. The ratio of share to cash payment for the transaction has not yet been determined and will be finalized after the target assets are audited and appraised, through mutual negotiation. Meanwhile, the company intends to raise supporting funds by issuing shares to no more than 35 specific investors via inquiry, with total proceeds not exceeding 100% of the transaction price paid by issuing shares to acquire the assets.

Notably, the issuance price for the shares involved in this transaction is significantly discounted. The issuance price is set at 2.16 yuan per share, which is no less than 80% of the average stock price over the 120 trading days before the pricing date (February 12, 2026). Compared to the pre-suspension closing price of 2.78 yuan per share, this issuance price reflects approximately a 22.30% discount.

From the transaction structure, this will constitute an related-party transaction. The counterparty, Electric Power Investment, and Zhongnan Culture are both controlled by Jiangyin Xinguo Lian Group Co., Ltd., and Zhongnan Culture’s Chairman, Xue Jian, is also the legal representative and chairman of the counterparty. Therefore, the transaction also involves internal asset transfer and integration under the same state-owned capital platform.

Public information shows that Sulong Thermal Power, the target of this acquisition, is a thermal power company established in 1993. As a major power and heat source in Jiangyin and a benchmark power plant in Jiangsu Province, it currently has six coal-fired generator units with a total installed capacity of 1.215 million kW and an annual power generation capacity of 7 billion kWh. Of particular interest is its growth potential: in June 2025, the company’s fourth-phase expansion project, with a total investment of about 5.6 billion yuan, has started construction. The project plans to build two ultra-supercritical, second reheat coal-fired units of 660,000 kW each, scheduled for completion and commissioning by June 2027. Once operational, the project is expected to generate up to 6 billion kWh annually, supply 2 million tons of heat, and increase annual sales revenue by nearly 3 billion yuan. If this project proceeds as planned, Sulong Thermal Power’s capacity will reach a new level.

However, financial data shows that the profitability of the target asset has fluctuated. According to disclosures, Sulong Thermal Power’s revenue in 2024 was 3.78 billion yuan, with a net profit of 620 million yuan; in 2025, revenue is expected to decline to 3.095 billion yuan, with a net profit of 347 million yuan. The announcement explains that the decline was mainly due to the company’s equity investment in Longyuan Guoneng Offshore Wind Power (Yancheng) Co., Ltd., which recognized a wind power renewable energy subsidy income of up to 1.026 billion yuan in 2024, contributing about 190 million yuan in investment income, significantly boosting the 2024 base. Excluding this non-recurring factor, Sulong Thermal Power’s performance has stabilized. Nonetheless, operating risks for thermal power companies—such as fuel cost fluctuations and the shift from “priority power generation” to a market position of “supply guarantee + regulation”—remain factors to watch in the future.

The recent operational status of Zhongnan Culture, the acquirer, shows a complex picture. In the first three quarters of 2025, the company achieved operating revenue of 910 million yuan, a year-on-year increase of 40.10%; net profit attributable to shareholders was 82.23 million yuan, up 130.97%. However, the company’s performance heavily relies on government subsidies and investment income, with non-recurring gains and losses, and its net profit after deducting non-recurring items was only 43.23 million yuan, down 33.69% year-on-year. During the same period, the net cash flow from operating activities was -84.75 million yuan, a decrease of 204.12%. As of the end of Q3 2025, the company’s cash and cash equivalents stood at 1.09 billion yuan.

(Source: Cailian Press)