SEP(SH:600021) Hua Xia Shi Bao·2025-09-11 14:55Core Viewpoint - Shanghai Electric Power Co., Ltd. has decided to terminate the acquisition of a 66.40% stake in K-Electric Limited in Pakistan, originally planned for $1.77 billion, due to unmet conditions and changes in the business environment [2][4]. Group 1: Acquisition Details - The acquisition process began in 2016 and involved multiple approvals from regulatory bodies, including the Pakistan Competition Commission and Chinese authorities [3][4]. - The deal faced challenges, including a new pricing mechanism in Pakistan that significantly reduced K-Electric's profitability and valuation [4]. - Shanghai Electric Power has been disclosing progress on the acquisition every 30 days since March 2017, indicating ongoing challenges and risks associated with the deal [4][5]. Group 2: Market Reaction - Following the announcement of the termination, Shanghai Electric's stock experienced significant volatility, initially dropping to the daily limit before rebounding to close at 22.01 yuan per share, a 5.87% increase [2]. - Over the past 60 days, the company's stock has seen a cumulative increase of 150.68% [2]. Group 3: Financial Performance - Shanghai Electric reported a net profit of 3.34 billion yuan in 2022, which is expected to grow to 20.46 billion yuan in 2024 [6]. - In the first half of 2025, the company achieved a revenue of 20.475 billion yuan, a year-on-year increase of 1.76%, and a net profit of 1.909 billion yuan, up 43.85% [6]. Group 4: Energy Portfolio - As of mid-2025, Shanghai Electric's installed capacity reached 25.8013 million kilowatts, with clean energy accounting for 61.83% of the total [7]. - The company has significant operations in various energy sectors, including coal, gas, wind, and solar power, with a notable increase in renewable energy generation [7]. Group 5: New Investments - Following the termination of the acquisition, Shanghai Electric is shifting focus to domestic clean energy projects, including a 500,000-kilowatt offshore solar project and a 400,000-kilowatt wind project in Heilongjiang [8].