On the evening of May 14th, the announcement of the clarification announcement and the falsification of the financial report, Hengtong Optoelectronics released a plan to repurchase shares in a centralized bidding transaction, saying that the company plans to use no less than RMB 300 million and no more than RMB 600 million. With its own funds and self-raised funds, the company’s shares will be repurchased at a price of no more than RMB 22 per share, used for employee stock ownership plans, conversion of corporate bonds issued by the company that can be converted into stocks.
On May 14, Hengtong Optoelectronics closed at 15.69 yuan/share, which was nearly 13% lower than the closing price of the company’s 17.4 yuan/share on May 9. The total market value decreased from 34.323 billion yuan to 29.9 billion yuan.
According to the latest closing price, the highest share repurchase price of Hengtong Optoelectronics exceeds 40% of the current 15.69 yuan/share.
Hengtong Optoelectronics, which was listed as a “white horse stock” by the market, was questioned on May 12th. There are articles on the Internet titled “The Mystery of Hengtong Optoelectronics’ 3.3 Billion Advance and the Group’s 6.9 Billion Other Receivables”, and it is questioned that the other receivables of the Hengtong Group are closely related to the target of Hengtong Optoelectronics.
On May 13, Hengtong Optoelectronics shares fell. Subsequently, the company issued an announcement to urgently clarify relevant issues, and said that some media quoted the article written in the name of “Xia Cao” and pointed out that “Xia Cao” was the former financial expert of Shanghai National Accounting Institute Zheng Zhaohui, “through the company and Zheng Zhao Hui himself verified that the article was not written by Zheng Zhaohui himself, and was used by others in the name of ‘Xia Cao’.”
On the evening of May 14, the Beijing News reporter searched the article on the Internet and found that some of the websites that had previously forwarded the article had deleted the above article.
The 3.3 billion prepayments were questioned and implicated in the listed company Kaile Technology
The Beijing News reported through the Internet that the above-mentioned “Hengtong Optoelectronics 3.3 billion advance payment and the group’s 6.9 billion other receivables mystery” article learned that the self-media believes that the target of Hengtong Optoelectronics and the parent company Hengtong Group’s “other receivables” There is a close relationship between the objects. He also questioned that Hengtong Optoelectronics prepaid RMB 3.3 billion to Kaile Technology in the case of raising funds of over RMB 6 billion.
On the evening of May 13, Hengtong Optoelectronics and Kaile Technology both responded urgently to questions from the media.
In the clarification announcement, Hengtong Optoelectronics stated that some of the investors of Hengtong Optoelectronics and other receivable customers of Hengtong Group “have no capital other than capital contribution”.
“The business operations and fund management of the Company are completely independent of the Hengtong Group and have not directly or indirectly provided funds to the controlling shareholders and actual controllers through any means.”
According to the non-public issuance report of Hengtong Optoelectronics in August 2017, the company issued shares to seven subscription targets, including Shanghai Pu Luo equity investment and actual controller Cui Genliang.
On May 13th, Hengtong Optoelectronics Co., Ltd. said that in 2017, investors who participated in Hengtong Optoelectronics’s increase in equity, Shanghai Proro Equity Investment and Cui Genliang did not have any investment with the Hengtong Group’s other receivable customers, Qingcheng Hengtong Investment, and Shanghai Huihui Equity Investment. Other capital exchanges have not occurred with other funds other than capital contribution from Pro Hongsheng and Shanghai Beizhiheng Investment.
In addition, Hengtong Optoelectronics’ prepayments were questioned. According to the 2018 annual report of Hengtong Optoelectronics, the prepayments at the end of 2018 were 3.336 billion yuan. Among them, the prepayments within one year amounted to 3.356 billion yuan.
According to the prepayments disclosed by the company, the advance payment of the top five balances according to the prepayments has an advance payment of RMB 2.334 billion for “Supplier One”, accounting for 78.97% of the total balance of the prepayments at the end of the period.
The above skeptical article stated that the advance payment of Hengtong Optoelectronics mainly flowed to Kaile Technology.
Clarification that the prepayments are determined by the bargaining power in the business segment
In this regard, Hengtong Optoelectronics stated in the clarification announcement that the prepayments are determined by the bargaining power in the business process. In this business, the final customer is a central enterprise, and the supplier is also designated by the customer. As a result, the company’s bargaining power on the supply side and on the client side is weak, and the business generates large prepayments. If the company manufactures itself directly instead of processing it, it will also generate large prepayments, which is determined by the bargaining power in the business process, not by processing.
Since the key components of the above-mentioned private network communication equipment account for a relatively high total cost, and due to the high technical content and speciality, it is necessary to fully prepay the purchase amount, and no actual cash expenditure occurs at the time of purchase. Therefore, the company prepaid to Kaile Technology in the form of bank acceptance bills, and then Kaile Technology prepaid the purchase price to its upstream suppliers. After the product is delivered to the customer, the payment is settled according to the agreement.
Kaile Technology also issued a clarification announcement that the company accepted the commission of Jiangsu Hengtong Cable Technology Co., Ltd. (hereinafter referred to as “Hengtong Cable”), a wholly-owned subsidiary of Hengtong Optoelectronics Co., Ltd. to carry out the back-end processing business of private network communication. After the contract was signed, Kaile Technology received the prepayment of 100% bank acceptance bill of Hengtong Cable, and then prepaid the purchase amount to the upstream supplier, and settled the goods according to the contract.
“The company has completed the processing and production in batches in accordance with the contract signed with Hengtong Cable. The company has now completed production and has delivered all the contracted goods in the near future. There is no situation in which the funds of Hengtong Cable are occupied.”
Last year’s performance growth slowed down, and the first quarter of this year’s performance declined.
According to the data, Hengtong Optoelectronics is a communication network and energy interconnection integrated solution provider. In 2018, the communication network business achieved an annual operating income of 12.448 billion yuan, a year-on-year increase of 13.10%; the energy interconnection industry realized an operating income of 9.616 billion yuan, a year-on-year increase of 23.51%. %.
Such performance growth has narrowed from the previous performance increase.
The data shows that Hengtong Optoelectronics’ annual revenue for the year of 2018 is 33.865 billion yuan, an increase of 30.5% over the same period of 2017; the net profit attributable to shareholders of listed companies is 2.53 billion yuan, an increase of 20.27% over the same period of 2017.
In 2016 and 2017, the company’s operating revenue grew by 41.74% and 34.4%, respectively; the year-on-year growth rate of net profit attributable to shareholders of listed companies was 129.81% and 60.20%, respectively.
In the first quarter of 2019, the net profit of Hengtong Optoelectronics declined. The net profit attributable to shareholders of the listed company was 457 million yuan, down 5.18% year-on-year.
Behind the decline in performance, Hengtong Optoelectronics’ share price fell by 34.36% (pre-recovery) in the past year. Its highest price was 37.08 yuan/share, and the lowest price was only 14.91 yuan/share.
After clarification, announce the premium repurchase of shares
After the release of the clarification announcement, on the evening of May 14, Hengtong Optoelectronics announced plans to repurchase the company’s shares, saying that the company intends to use its own funds and self-raised funds of not less than RMB 300 million and not more than RMB 600 million. RMB 22 yuan / share price repurchase company shares, used for employee stock ownership plan, conversion company issued convertible stocks of corporate bonds, if the company fails to use within 36 months after the completion of the share repurchase implementation has been returned Purchased shares, unused shares that have not been used will be cancelled.
“In order to protect the interests of investors, combined with the recent stock price of the secondary market of the company, the price of this repurchase shares does not exceed RMB 22 yuan / share, the price limit of the repurchase shares is not higher than the 30 trading period before the board of directors passed the repurchase resolution. The comprehensive company’s secondary market stock price, the company’s financial status and operating conditions are determined.”
In the view of Hengtong Optoelectronics, “the current share price does not fully reflect the company’s value.”
On May 30, Hengtong Optoelectronics will hold a general meeting of shareholders to vote on the proposal on the “Repurchase of Shares by Central Auction”.
Hengtong Optoelectronics stated that “this repurchase plan still needs to be submitted to the company’s general meeting of shareholders for consideration and approval by special resolution, and there is a risk that the shareholders’ meeting will not be considered.”
Accounts receivable have exceeded 9 billion yuan, almost one-third of the company’s total market capitalization
According to the 2018 annual report of Hengtong Optoelectronics, the total amount of notes receivable and accounts receivable at the end of the reporting period was 9.613 billion yuan, accounting for 25.44% of the total assets at the end of the period, an increase of 32.34% from the end of the previous year.
Such accounts receivable figures are almost one-third of the company’s total market capitalization. In the annual report, Hengtong Optoelectronics stated that “mainly for the increase of operating income during the reporting period, the accounts receivable increased accordingly”.
According to the accounts receivable details, the accounts receivable of 8.185 billion yuan belong to accounts receivable, and 1.428 billion yuan is notes receivable. By the end of the first quarter of 2019, its accounts receivable total notes receivable were 10.72 billion yuan, of which accounts receivable were 9.33 billion yuan.
It is worth noting that Hengtong Optoelectronics did not disclose the details of the major customers of the company’s accounts receivable. According to the company’s 2018 annual report, the accounts receivable of the top five customers totaled 2.69 billion yuan, of which the accounts receivable of the largest customer “Customer 1” with the first account receivable was 900 million yuan.
The accounts receivable of Hengtong Optoelectronics are Xi’an Xiguguang Communication Co., Ltd. and Weihai Weixin Optical Fiber Technology Co., Ltd., among which Xi’an Xiguguang Communication accounts receivable is 186 million yuan.
According to the situation of the top 5 accounts receivable of the balance of the arrears, the second name is Hengtong Optoelectronics International Co., Ltd., corresponding to accounts receivable of 349 million yuan; Heilongjiang Telecom National Pulse Engineering Co., Ltd. corresponds to accounts receivable The amount is 85.65 million yuan.
According to the data, Hengtong Optoelectronics International and Heilongjiang Telecom Guomai are Hengtong Optoelectronics Co., Ltd., and Xi’an Xiguguang Communication is a joint venture of Hengtong Optoelectronics.
Beijing News reporter Li Yunqi editor Yue Caizhou proofreading Yang Xuli
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