The actual controller proposed to subscribe for non-public shares with 600 million yuan to "transfuse" the listed company.
The stock price of low altitude economic concept stock Xinyan Shares (300159.SZ), if riding a roller coaster, rose by 20cm the previous day, but fell sharply the next day. On May 21, Xinyan shares fell by more than 10%. On the news side, the company received the inquiry letter on the 2023 annual report of Shenzhen Stock Exchange on the evening of May 20, and the supervision required the company to explain whether there was liquidity risk, the solution to overdue debt and whether it might touch the situation of implementing delisting risk warning.
Xinyan is specialized in the research, design, manufacturing and sales of agricultural machinery. In 2015, the company entered the aerospace aircraft parts manufacturing industry through the acquisition of Sichuan Tomorrow Aerospace Industry Co., Ltd. (hereinafter referred to as "Sichuan Tomorrow Aerospace"), realizing the strategic layout of "aerospace+agricultural machinery".
At the 2024 NPC and CPPCC, "low altitude economy" was written into the government work report for the first time, and policies for developing low altitude economy emerged frequently throughout the country. Reflected in the capital market, since February 2024, the stock price of low altitude economic concept stocks has repeatedly hit new highs. The share price of Xinyan, which was included in the low altitude economic concept stock, took off on the trend. From early February 2024 to mid May 2024, the share price rose from 1.51 yuan/share to a high of 3.25 yuan/share, doubling.
Tight capital chain leads to regulatory inquiry
In recent years, the liquidity problem of Xinyan Shares has become prominent.
According to the 2023 annual report of Xinyan Shares, Daxin Certified Public Accountants (special general partnership) has issued an unqualified audit report on the company's 2023 annual financial report with significant uncertainties related to continuing operations, which mainly involves the company's net loss of 133 million yuan in 2023, current liabilities of 1.082 billion yuan higher than current assets, and asset liability ratio of 99.16%, The principal of outstanding loans of financial institutions due was 758 million yuan. At the end of the reporting period, the monetary capital balance of Xinyan Shares was 487 million yuan, with net assets attributable to the parent company of 34 million yuan; Interest expense incurred during the reporting period was 140 million yuan.
In this regard, Shenzhen Stock Exchange required Xinyan Research Shares to analyze and explain whether the company has liquidity risk, the specific situation of the overdue debt solution, the recovery measures taken by creditors, whether it is facing greater debt repayment pressure, and whether it has a significant adverse impact on the daily operation of the company in combination with the company's cash flow, the repayment arrangement of interest bearing liabilities, the company's financing channels and capabilities, etc, And describe the improvement measures to be taken by the company, and fully remind relevant risks;
At the same time, SZSE requires the company to explain the reason why the company's net assets attributable to the parent company in the current period are low, and whether it may touch the situation of delisting risk warning in Article 10.3.1 of the GEM Listing Rules (revised in August 2023), in combination with the current operating conditions, interest expenses, recognition and basis of major order revenue in the fourth quarter, and order gross margin.
In addition to the debt problem, the revenue and profit of Xinyan Shares will decline in 2023, which is also a major concern of the regulators.
The 2023 financial report shows that the operating revenue of Xinyan will reach 1.191 billion yuan during the period, a year-on-year decrease of 44.46%. Among them, the operating revenue of agricultural machinery business and aerospace vehicle parts business was 988 million yuan and 203 million yuan respectively, down 23.48% and 76.20% respectively year on year, and the gross profit margin was 30.96% and -5.60% respectively, up 1.05 percentage points and down 32.16 percentage points year on year. In 2023, the company will achieve a net profit of - 133 million yuan; In the first quarter of 2024, the company only realized an operating income of 31 million yuan.
Shenzhen Stock Exchange requires Xinyan Shares to explain the reasons and rationality of the sharp decline in operating revenue and net profit in 2023 by business, whether the recognition of early revenue is reasonable and prudent, and whether there is cross period recognition of revenue in combination with industry conditions, comparable companies, changes in sales and revenue recognition policies, etc. In addition, the regulation also requires Xinyan to explain why the gross profit margin of aerospace vehicle parts business is negative, and why the gross profit margin of agricultural machinery business has increased despite the decline in revenue.
In addition, Shenzhen Stock Exchange also paid attention to the provision for bad debts of accounts receivable of RMB 167 million, provision for inventory falling price of RMB 33 million and provision for impairment of fixed assets of RMB 269 million of Xinyan Shares in 2023. In this regard, Shenzhen Stock Exchange requires the company to explain whether the provisions are sufficient according to the specific situation.
Source: official website of Xinyan The actual controller takes action to relieve the company's debt pressure
In the last three years, the asset liability ratio of Xinyan shares has been on the rise as a whole. By the end of 2023, the asset liability ratio of the company has reached 99.16%, far higher than that of companies in the same industry. In 2024, the company's liquidity problem remains to be solved. According to the first quarter report of 2024, by the end of March 2024, the company's short-term borrowings were about 1.059 billion yuan, long-term borrowings were about 228 million yuan, and monetary capital was only 395 million yuan.
The interest expense generated by the debt also caused a significant drag on the profits of Xinyan Shares. The financial report shows that the Company's non net profit deduction in the first quarter of 2024, 2023, 2022 and 2021 is respectively -66.2593 million yuan, - 153 million yuan, 65.392 million yuan and - 270 million yuan, and the interest expense in the same period is respectively 31.4296 million yuan, 140 million yuan, 139 million yuan and 130 million yuan.
In order to relieve the capital pressure of Xinyan Shares, the company's actual controller Zhang Yang and controlling shareholders extended a helping hand.
On the evening of May 14, it was announced that New Research Shares planned to issue shares to Ningbo Huakong and Jiaxing Huakong, which were controlled by the controller, at a price of 1.7 yuan per share, and raised no more than 600 million yuan, which would be used to repay bank loans and supplement working capital. Ningbo Huakong intends to subscribe for no more than 500 million yuan and Jiaxing Huakong plans to subscribe for no more than 100 million yuan.
After the issuance, Ningbo Huakong and Jiaxing Huakong will hold 15.88% and 10.10% of the company's shares respectively, and Ningbo Huakong will become the controlling shareholder of the company, but the actual controller is still Zhang Yang.
In January 2019, Jiaxing Huakong became the controlling shareholder of Xinyan Shares by means of "equity transfer+voting power entrustment", thus making itself known as the actual controller of Xinyan Shares. At that time, the two sides of the transaction hit it off. Prior to the transfer of shares by the original largest shareholder of Xinyan Shares, all the shares held by Xinyan Shares were pledged, and the company was already under great pressure to repay its debts at that time.
Although it is the controlling shareholder, Jiaxing Huakong held only 8.59% of its shares in the year. In order to further enhance the consolidation right and relieve the company's debt pressure, Jiaxing Holdings planned to invest 1.2 billion yuan in July 2019 to fully subscribe for the non-public offering shares of Xinyan shares, and the raised funds will be used to repay bank loans. However, this fixed increase has not been implemented and will be withdrawn in 2021.
It should be noted that in January 2024, the original shareholders of Jiaxing Huakong and Xinyan Shares terminated the delegation of voting rights. So far, Jiaxing Huakong and its related shareholders only hold 10.79% of the company's shares in total. This means that if the fixed increase of Xinyan Shares in 2024 is successfully completed, it will undoubtedly further consolidate the publicized real control. At the same time, the debt problem of Xinyan Shares that has been delayed so far can also be alleviated to some extent.
Publicity and China Holdings Fund
After becoming the actual controller of Xinyan Shares, Zhang Yang did not hold a post in the listed company, but sent a group of "elite soldiers" to settle in the listed company.
Among the current 6 non-executive directors of Xinyan Shares, 5 hold positions in the affiliated companies of Jiaxing Huakong. Fang Desong, the chairman of the board, and Chang Guoxuan, Wang Shaoxiong, Lu Huafei and Xie Chen, the directors, all worked in Beijing Huakong Investment Consulting Co., Ltd. (formerly known as Beijing Huakong Huijin Investment Consulting Co., Ltd., hereinafter referred to as "Beijing Huakong"). These directors have served as investment managers in Beijing Huakong.
According to industrial and commercial data, Beijing Huakong focused on investment management and was founded in 2008. After equity penetration, Beijing Huakong was actually controlled by Zhang Yang, indirectly holding 99.67% of shares, and served as the chairman and manager. Beijing Huakong once held 90% of Jiaxing Huakong as a limited partner.
Who is publicity?
In addition to the identity of the actual controller of Xinyan Shares, Zhang Yang is also the chairman and founder of China Holdings Fund, a well-known domestic investment institution. Before founding Huakong, Zhang Yang was a scholar to the letter. He was a doctor of finance of the Chinese Academy of Social Sciences and has been engaged in research in asset management, fund investment and other fields. Since then, he has "abandoned literature and started business", leading China Holdings to gradually become the leading PE organization in China.
At present, Huakong Fund manages many VC, PE, industry funds, M&A funds, private equity funds with general aviation and military industry as the main industry research and investment direction. At present, the fund size under management exceeds 10 billion yuan, and the main team comes from Tsinghua University. Jiaxing Huakong is one of the sub funds of Huakong Fund.
In the field of aerospace, in addition to new research shares, Huakong Fund also invested in listed companies such as North Motech (002985. SZ), Lihang Technology (603261. SH), Triangle Defense (300775. SZ), and Guanglian Aviation (300900. SZ). In addition, in 2023, four enterprises invested by China Holdings Fund will be listed successfully, namely, Kangxi Communication, Tailing Microelectronics, Zhongke Feice, Yuntian Lifei. The past projects Jialiqi and Jintian Titanium have also submitted for registration and are waiting for listing.
