Application Of REITs In The Green Transformation Of Listed Power Companies

The power industry is a sector with relatively high carbon emissions in China.Under the promotion of the "dual carbon" policy,it is imperative for traditional power companies to transform into green energy.Enormous investment in clean energy projects,combined with high raw material costs in recent years,has depleted the financing capabilities of these companies.Traditional power enterprises are facing a dilemma between stocks and bonds,and urgently need to find more direct and effective ways of financing.In May 2022,clean energy projects were officially included in the scope of public REITs(real estate investment trusts)pilots in China.By adopting the "public fund + asset securitization" method,public REITs can activate existing assets of companies,improve liquidity shortages,and alleviate financing constraints.Traditional power companies can take advantage of the historic opportunity of the rapid development of public REITs in China to achieve their own green transformation.At the same time,public REITs products provide stable returns and enrich the variety of products in China’s capital market.Shenzhen Energy Group,a representative company in the power industry,is selected as the research subject for the first domestic clean energy public REITs product it issued.Using event analysis method,the changes in Shenzhen Energy’s market value before and after the issuance of public REITs products are studied,and the results show that Shenzhen Energy’s market value achieved a cumulative excess return of 8.02% after the announcement of the public REITs issuance.This indicates that the issuance of public REITs products has been recognized by the market and has improved the company’s value.By analyzing the utility of public REITs products on the company through financial indicators,it is found that the product issuance has improved the company’s debt-paying ability and improved its asset structure.After the product was launched,Shenzhen Energy’s quick ratio increased by 28.57%,and the quick ratio exceeded1 for the first time in three years.It also activated the company’s fixed assets,improved asset liquidity,and helped the company achieve lightweight asset operation.In addition,the issuance of public REITs products helped Shenzhen Energy out of its profit slump and improved the company’s growth capabilities.After the product was launched,the company’s net asset return rate,sales net profit rate,and other indicators improved,and revenue and asset indicators can still maintain positive growth against the trend.Through the Z-Score model,the analysis of the company’s operating conditions before and after the product was launched shows that the issuance of the product strengthened the company’s ability to resist financial difficulties and improved the overall financial security of the company.Through the fuzzy comprehensive evaluation method,the impact of public REITs on the green transformation of listed power companies was analyzed.The conclusion is that Shenzhen Energy’s clean energy REITs project has a general overall risk tendency.The three risk levels,including infrastructure project-level risks,REITs fund-level risks,and other related risks,are all slightly general.To promote the better development of public REITs for subsequent power generation companies in China,to help traditional power companies transform into green energy,policy recommendations were proposed,including smooth connectivity mechanisms between green PPP and public REITs products,accelerating the market-oriented reform of electricity prices,and gradually relaxing the participation threshold for investors.