After three years, the deal is finalized! Tunnel Co. secures over half of China Energy Construction's private placement with 3.5 billion yuan, and the mysterious "whale investor" Wang Zixu subscribes approximately 300 million yuan.

Ask AI · How does the three-year fixed increase journey reflect new trends in central-local cooperation?

Reporter: Cai Ding Editor: Chen Junjie

Tunnel Co., Ltd. (SH600820, stock price 6.36 yuan, market value 19.996 billion yuan) announced on the evening of March 19 that the company will participate in the subscription of approximately 1.373 billion A-shares issued by China Energy Engineering Group (SH601868) to specific entities at a price of 2.55 yuan/share, accounting for 3.1% of China Energy’s total share capital after the issuance.

According to the announcement, this transaction does not involve related party transactions and does not constitute a significant asset restructuring, so it does not need to be submitted for shareholder meeting approval. The shares subscribed by Tunnel Co., Ltd. in this fixed increase cannot be transferred within six months from the date of registration and listing. Meanwhile, China Energy also disclosed the allocation results of this fixed increase in its announcement today (March 19), with Tunnel Co., Ltd. receiving the largest allocation of approximately 1.373 billion shares among the eight specific entities.

Tunnel Co., Ltd. acquires more than half of the shares

The announcement shows that the subscription agreement between Tunnel Co., Ltd. and China Energy was signed on March 9. However, based on Tunnel Co., Ltd.'s subscription price of 2.55 yuan/share, it is approximately 24.11% lower than China Energy’s closing price of 3.36 yuan/share today.

It is worth noting that the total number of shares issued in this fixed increase by China Energy is approximately 2.549 billion shares, which means that Tunnel Co., Ltd. alone accounts for 53.85%.

Tunnel Co., Ltd. stated that China Energy has a profound historical accumulation and significant industry position in the energy and power, and water conservancy sectors, and is a main force in the construction of the national new energy system and green low-carbon transformation. In June 2024, the Shanghai municipal government signed a new round of strategic cooperation agreement with China Energy, conducting comprehensive cooperation in areas such as energy supply, green low-carbon industries, urban construction, and energy infrastructure, jointly promoting the construction of green smart cities.

“Strategic investment in China Energy is an important action for Tunnel Co., Ltd. as a state-owned enterprise in Shanghai, responding to and innovating the central-local cooperation model. It is an important measure for Tunnel Co., Ltd. to implement the development strategy of ‘capital-driven’ growth, enhance the comprehensive layout in the infrastructure sector, and promote sustainable development,” Tunnel Co., Ltd. added.

At the same time, Tunnel Co., Ltd. also disclosed two major risks, including that the development of China Energy may fall short of expectations and that fluctuations in China Energy’s stock price may lead to uncertainty in returns.

Three-year fixed increase process, allocation also includes “bull investor” Wang Zixu

A reporter from the Daily Economic News noted that the earliest traceable point of this fixed increase by China Energy dates back to February 2023, when the company held a board meeting to review and approve the private placement plan. Shortly thereafter, in March 2023, the State-owned Assets Supervision and Administration Commission of the State Council approved the overall plan in principle.

During the process, the company held board and shareholder meetings in February and March 2024, respectively, extending the resolution’s validity period by 12 months. By June 2024, the company adjusted the amount and use of the raised funds. The plan was approved by the Shanghai Stock Exchange in May 2025 and received registration approval from the China Securities Regulatory Commission in June 2025, ultimately completing the funds transfer and capital verification in March 2026.

The joint lead underwriters sent subscription invitations to 295 qualified investors, including 16 of the top 20 shareholders, 35 fund companies, 19 securities companies, and 18 insurance companies. Ultimately, 10 subscription entities submitted valid bids.

According to the announcement from China Energy, a total of 8 entities were finally allocated shares in this fixed increase. In addition to Tunnel Co., Ltd., CRRC Capital Holding Co., Ltd. subscribed nearly 750 million yuan, China National Enterprise Structural Adjustment Fund Phase II Co., Ltd. subscribed approximately 650 million yuan, and Xuzhou Daren Tongying Management Consulting Partnership subscribed nearly 700 million yuan. Additionally, institutions such as Nord Fund, Jiaoyin Life Insurance, and individual investor Wang Zixu also participated in the subscription.

Image source: Announcement from China Energy

It is worth noting that the aforementioned individual Wang Zixu is a “bull investor” who has been very active in the capital market in recent years, frequently appearing in judicial auctions and the secondary market, spending hundreds of millions of yuan at a time, but little is known about his personal situation. According to other public information, Wang Zixu was born in 2003 and is only 23 years old, with a contact address located in Shenyang, Shenhe District. Based on the first six digits of his ID number, he is identified as a person from Shenyang.

Image source: Announcement from China Energy

According to the announcement from China Energy, Wang Zixu offered a maximum subscription price of 2.9 yuan/share, significantly higher than the subscription prices of most other issuance entities. In addition to this investment of about 300 million yuan to subscribe for China Energy’s fixed increase, the reporter noted that Wang Zixu previously also participated in the subscription of 1.2497 million shares of Honghe Technology’s private placement at a subscription price of 40.01 yuan/share, with a total subscription amount of nearly 50 million yuan.

Daily Economic News