China Fund News reporter Wen Xi
The old "demon stocks" that were speculated by hot money due to cross-border semiconductors are facing a change of ownership again.
On the evening of January 28, Gengxing Shares disclosed an announcement stating that 97.56% of the company's shares held by its controlling shareholder Zhonggeng Real Estate Group Co., Ltd. (referred to as "Zhonggeng Group") will be judicially disposed of and auctioned. This also means that nearly seven years after taking ownership of Gengxing Holdings, this Fujian-based real estate company that is in turmoil may be out of business. When
first took over Oriental Silver Star, the predecessor of Gengxing Group, Zhonggeng Group did not hesitate to obtain the controlling stake at a premium rate of more than 50%. Since then, Oriental Silver Star has been on the road of business transformation, with cross-border areas including semiconductors, new energy charging piles, etc.
But the embarrassing thing is that in addition to making listed companies the target of hot money speculation, cross-border transactions have not changed the company's operating conditions. Where will the controlling stake of Gengxing Shares, which has changed hands three times, be transferred to?
The controlling shareholder failed to fulfill the ruling
Gengxing Shares Announcement shows that 79.9296 million shares of the listed company held by Zhonggeng Group are planned to be auctioned for judicial disposal, accounting for 97.56% of the company’s shares held by it and 34.71% of the company’s total share capital. With such a large proportion of
's equity being auctioned by the judiciary, Gengxing's shares will also face a change of ownership. The company said that if this judicial auction is successful, it may lead to the risk that the company's actual controller and controlling shareholder will change or the company will become without an actual controller.
Why are the shares held by Zhonggeng Group being auctioned? Gengxing Shares stated in the announcement that Xiamen Trust applied for judicial freezing of 66.6624 million unrestricted tradable shares held by Zhonggeng Group due to breach of contract in the stock pledge business. Later, Zhonggeng Group failed to fulfill the ruling made by the Xiamen Arbitration Commission on the above case. , Xiamen Trust applied for enforcement to the Shanghai Financial Court, and the Shanghai Financial Court ruled to change the value of the above-mentioned shares held by Zhonggeng Group.
In addition, because a subsidiary of Zhonggeng Group was involved in a factoring contract dispute, Zhonggeng Group, as a guarantor, was applied by Shanghai Guokun Commercial Factoring Co., Ltd. to judicially freeze its 13.2672 million restricted tradable shares of the company. Later, Zhonggeng Group was The group also failed to fulfill the ruling, and Shanghai Guokun applied to the Shanghai Financial Court for enforcement.
In fact, during the period when the real estate industry was booming, Zhonggeng Group was one of the representatives of Fujian real estate companies to increase their scale. Information shows that Zhonggeng Group was founded in 1997. Since 2006, the company has begun a nationwide layout, moving out of Fuzhou and into Dalian, and then landed in Jiangsu, Beijing, Chongqing and other places.
Subsequently, following the footsteps of Fujian real estate companies such as Shimao and Xuhui, Zhonggeng Group moved its headquarters to Shanghai. The expansion along the way has made Zhonggeng Group one of the top 100 companies in scale. In 2018, Zhonggeng Group’s trading amount reached 23.21 billion yuan, ranking 94th.
Zhonggeng Group has sought to go public many times, trying to supplement funds through the capital market. The acquisition of Eastern Silver Star, the predecessor of Gengxing shares, is an important step for Zhonggeng Group. In the eyes of the market, it is largely for the purpose of "backdoor" listing.
The controlling stake has changed hands three times
Looking back on the past, Gengxing shares have had a difficult life, and its controlling stake has changed hands three times. The first change of ownership of
occurred in 2005. At that time, Silver Star Intelligent Industry took over "*st Ice Bear" (the predecessor of Oriental Silver Star), and the listed company was subsequently renamed Oriental Silver Star. After the restructuring, Oriental Silver Star turned to the real estate industry, but after 2010, Oriental Silver Star's real estate business stagnated.
However, at that time, "shell companies" with small and medium-sized market capitalization were the targets of competition for funds from all walks of life in the capital market. In 2013, after four consecutive placards, Yushang Group acquired 20% of Oriental Silver Star's shares and became the company's second largest shareholder. Immediately, the internal fighting among shareholders of listed companies began, and the corporate governance situation was extremely chaotic. The second change of ownership of
’s controlling stake occurred in August 2015. Silver Star Intelligent Industry transferred all its shares in Oriental Silver Star to Jinzhong Zhongxin and withdrew completely. However, the protagonist has changed, and the palace battle continues. Yushang Group continued to increase its holdings, and for a time a "dual-headed board of directors" situation emerged. In October 2016, Jin Zhongxin's shareholding ratio increased to 32%, surpassing Yushang Group, which held 31%.
In March 2017, the controlling stake changed hands for the third time.Jinzhong Zhongxin sold the 38.3744 million shares it held to Zhonggeng Group at a price of 56.03 yuan per share, a premium of 51%, and the total transfer price reached 2.15 billion yuan. This time, the shares held by Zhonggeng Group have been forced to sell, and Gengxing shares may once again face a change of ownership.
With the entry of Zhonggeng Group, Oriental Silver Star has embarked on a dazzling cross-border business. The main business of Oriental Silver Star was first transformed into a commodity supply chain management business focusing on coal (including coke), etc. However, the gross profit margin and profitability of this business were generally not high. For the whole year of 2022, the gross profit margin of this business will be only 1.34%.
In 2018, Oriental Silver Star planned to purchase 60% of the equity of Ningbo Zhongkairun through its wholly-owned subsidiary in cash, and then the target was changed to 51% of the equity of Qifan Investment. The latter is mainly engaged in investment in real estate-related fields, and already has Fuzhou Regional real estate project investment. But in the end, this “backdoor” acquisition fell through.
What attracts the most market attention is that in 2021, Oriental Silver Star will cross-border the semiconductor field. The company invested 30 million yuan to subscribe for Wuhan Minsheng's new registered capital and holds 2.91% of Wuhan Minsheng's equity. Wuhan Minsheng is a mems manufacturer. It is worth noting that the company is currently cooperating with another listed company, Sai Microelectronics, to build a baw filter chip production line.
At that time, the semiconductor concept was at its hottest. Coupled with the hot money speculation, Oriental Silver Star's share price rose by more than 208% in only 39 trading days. However, the company's stock price has turned downward since hitting a high of 46.5 yuan on July 6 of that year.
From July to September 2023, the market also heard rumors that Wuhan Minsheng was backdooring Gengxing shares, which further boosted its stock price.
Last year, Gengxing Shares began a new transformation. The company announced its entry into the new energy business, mainly operating charging piles and charging stations. However, according to the company’s previously disclosed executive resume and employee composition, Gengxing’s original team lacked experience in the new energy industry.
What’s even more embarrassing is that according to the 2022 annual report, the company has only 37 employees, mainly sales, management and administrative staff, and 0 production and technical staff. According to the 2023 semi-annual report of Gengxing Co., Ltd., its new energy vehicle charging business is still in the preparatory stage and has not officially opened for operation and generated business income.
's performance continues to be sluggish,
's continuous changes in controlling ownership and dizzying business transformation have not brought a performance boost to Gengxing Shares.
In 2021 and 2022, Gengxing's revenue will be 1.612 billion yuan and 1.848 billion yuan respectively, a year-on-year decrease of 40.17% and an increase of 14.61% respectively; net profits will be -42.75 million yuan and 16.94 million yuan respectively, a year-on-year decrease of 287% and 16.94 million yuan respectively. An increase of 135%.
By 2023, the company’s performance will experience a “double decline” again. In the first three quarters of 2023, the company achieved revenue of 484 million yuan, a year-on-year decrease of 70%; the net loss was approximately -32.37 million yuan, a year-on-year decrease of 649%, and it turned from profit to loss.
It is worth mentioning that Gengxing Shares previously faced the risk of related parties occupying funds. In 2022, due to the failure of related companies to arrange payment collection and delivery settlement as agreed, nearly 170 million yuan of related funds were occupied. The 2022 annual report of Gengxing Co., Ltd. was issued an audit report with qualified opinions by the audit agency.
In this announcement, Gengxing Co., Ltd. stated that from 2021 to 2022, the company has been occupied by non-operating funds of Zhonggeng Group and its related parties. As of April 26, 2023, the controlling shareholder and its related parties have fully returned the above-mentioned non-operating funds and interest.
On January 15, Gengxing Shares announced that it received a "Notification of Case Filing" issued by the China Securities Regulatory Commission on that day. Because the company was suspected of illegal information disclosure, the China Securities Regulatory Commission decided to open a case against the company.
Editor: Captain
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