Hexun stock Andy
To solve the problem of competition in the industry, we must also have a reasonable valuation, and more importantly, the plan must be fair and objective.
On May 23, Dashang Co., Ltd. (600694) announced that the controlling shareholder Dashang Group will postpone its commitment to resolve horizontal competition. The next day, the company issued another announcement, intending to acquire 100% equity of four subsidiaries of Dashang Group and Dashang Investment for about 814 million yuan in cash – Zhuanghe Qiansheng, Donggang Qiansheng, Shenyang Qiansheng, Anshan Commercial Investment, In order to improve the business layout adjustment and solve the competition in the same industry.
However, the related acquisition plan of Dashang shares has raised questions from the Shanghai Stock Exchange. A few days ago, the Shanghai Stock Exchange issued a supervisory work letter to the company on this matter, requiring it to answer the valuation of the target, the standardized operation of the target, the assets and liabilities of the target, performance commitments and compensation, and data validity.
The target company’s performance has declined in recent years, and the evaluation value-added rate is up to 99 times
The evaluation notes show that the net profit of the four target companies in the future forecast period has declined compared with the average level of net profit in recent years. In terms of evaluation methods, the four companies all chose the evaluation results with higher valuations.
Source: Dashang Announcement
Specifically, the assessed values of Anshan Commercial Investment, Zhuanghe Qiansheng, Shenyang Qiansheng, and Donggang Qiansheng were determined to be 566 million yuan, 114 million yuan, 79.983 million yuan and 54.4566 million yuan respectively, and the value-added rates were 611.75%, 1331.19%, 296.62% and 9925.43%, the highest is over 99 times. And the net assets of Shenyang Qiansheng and Donggang Qiansheng are negative.
Therefore, the Shanghai Stock Exchange requires Dashang to explain the commercial rationality and necessity of the acquisition under the condition that the target company’s performance has declined in recent years and some of the target’s net assets are negative, and that different valuation methods are selected and the valuations are all high. whether it may harm the interests of listed companies and minority shareholders.
The overall asset-liability ratio of the target company is high
The data shows that as of September 30, 2021, the asset-liability ratios of the four target companies Zhuanghe Qiansheng, Donggang Qiansheng, Shenyang Qiansheng and Anshan Commercial Investment were as high as 87.87%, 101.03%, 116.41% and 91.53%, respectively. for operating liabilities. Among them, the asset-liability ratio of Anshan Commercial Investment has increased significantly compared with the end of 2020, mainly due to the confirmation of payable dividends of 348 million yuan within the evaluation base date.
The Shanghai Stock Exchange requires Dashang to explain the reason and rationality of the target company’s high asset-liability ratio. For the incident of Anshan’s commercial investment surprise large-scale dividend distribution, it requires the company to explain the reason and rationality of selecting the dividend on the evaluation base date, whether it will affect the normal operation of the company.
The full payment was paid shortly after the completion of the delivery of the target equity. The company’s 604 million yuan has not yet been recovered.
The announcement shows that Dashang’s affiliated acquisition adopts installment payment. The company pays 50% of the investment within 5 working days after the agreement takes effect, and pays the remaining 50% of the investment within 5 working days after the completion of the delivery of the target equity.
The Shanghai Stock Exchange asked Dashang to explain whether the payment arrangement for the transaction is conducive to protecting the interests of the listed company. Regarding the performance commitments and compensation commitments mentioned in the announcement, the Shanghai Stock Exchange requires the company to explain whether there are guarantees or other safeguards.
In addition, the audit report shows that as of September 30, 2021, the balance of funds managed by the headquarters of Anshan Commercial Investment was 604 million yuan, and Anshan Commercial Investment was 100% owned by Dashang Investment.
The Shanghai Stock Exchange requires Dashang to additionally disclose the details of other receivables related to Anshan’s commercial investment, explain whether there is capital occupation by related parties, and self-examine whether there are related parties’ capital occupation in other target companies, and explain the follow-up settlement arrangements.
In addition, the Shanghai Stock Exchange requires Dashang to supplement the disclosure of relevant financial data.
After the disclosure of the regulatory letter, the stock price fell, and some investors criticized the related parties as “unsightly”
After the disclosure of the regulatory letter, the company’s stock price fell due to various factors. Data shows that on June 1, the stock price of Dashang shares was operating at a low level throughout the day. As of the close in the afternoon, the company’s share price was 17.89 yuan per share, down 1.97%.
It is worth noting that the supervisory letter of the Shanghai Stock Exchange has caused widespread controversy among investors in the secondary market. Some investors commented on the stock bar that the premium is normal, and solving the horizontal competition is beneficial to the listed company; some investors bluntly said that the related parties of the transaction are “unsightly”, and said that such “robbery and self-stealing acquisitions” will not pass the general meeting of shareholders.
Source: Oriental Fortune
Some investors said on SSE e-interaction that they no longer hope that listed companies will gain much benefit from related acquisitions, and only want to not harm the common interests of listed companies and shareholders.
Source: SSE e-interaction Dashang Homepage
It is understood that Dashang Co., Ltd. will hold the company’s second extraordinary general meeting in 2022 at 9:00 am on June 13 to review matters related to related-party acquisitions. The equity registration date is June 6. The meeting location is: Zhongshan District, Dalian City Conference room on the eleventh floor of the company headquarters, No. 1 Qingsan Street.
What is particularly noteworthy is that in this shareholders’ meeting, Dashang Group, a related shareholder of Dashang, will abstain from voting. Data shows that as of March 31, 2022, Dashang Group held 86.6667 million shares of the company, with a shareholding ratio of about 29.51%. The remaining shareholders with a shareholding ratio of more than 1% are Dalian Guoshang Asset Management Co., Ltd. (hereinafter referred to as “Guoshang Asset Management”), Central Huijin Asset Management Co., Ltd., Yang Longhuo, and Mao Yueming, with a shareholding ratio of 8.52%. , 2.91%, 1.90%, 1.12%.
Among them, according to Tianyancha, Guoshang Asset Management is 100% controlled by Dalian State-owned Assets Investment Management Group Co., Ltd. Gui Bing, director of Dashang Co., Ltd., used to be the deputy director of Dalian State-owned Assets Supervision and Administration Commission. In September 2018, he was appointed as the secretary of the party committee and general manager of Dalian Equipment Investment Group Co., Ltd. It voted in favor of the related-party acquisition proposal at the third meeting of the eleventh board of directors held by Dashang on May 25, and Guoshang Asset Management may vote in favor at the general meeting of shareholders. The remaining shareholders are not represented on the board of directors of Dashang, and their opinions are still unclear.
(Editor in charge: Wei Jingting)