On February 21, Shanghai Feilo Acoustics Co.Ltd(600651) (600651, SH) announced that the company plans to sell 100% equity of Shanghai Feile Investment Co., Ltd. (hereinafter referred to as “Feile investment”) through public listing and transfer on Shanghai Stock Exchange. The listing transaction condition is that the delisting party shall bear joint and several guarantee liabilities and provide corresponding asset guarantee for all the debts of Feile investment to Shanghai Feilo Acoustics Co.Ltd(600651) and the bank liabilities of Feile investment.
Shanghai Feilo Acoustics Co.Ltd(600651) said that the counterparty will pay the transaction consideration in cash according to the above-mentioned public listing results of state-owned property rights.
At present, Feile investment is the management platform of Shanghai Feilo Acoustics Co.Ltd(600651) lighting business. However, in recent years, Feile investment, Yaming Lighting and Feile construction are in poor operation and are in a state of continuous loss, which has greatly dragged down the overall operation and development of listed companies.
Divestiture of loss making business
On January 28, Shanghai Feilo Acoustics Co.Ltd(600651) transferred all the equity of its wholly-owned subsidiaries Yaming Lighting and Feile construction to Feile investment free of charge. After the completion of the transaction, Feile investment will hold 100% equity of Yaming Lighting and Feile construction, and Feile investment will become the management platform of the lighting business of listed companies.
With xiwannian group as the core, Feile investment is mainly engaged in the wholesale and retail of light source and lamp products and lighting engineering channel projects, focusing on different market segments through its three characteristic brands of Sylvania, lumiance and concord. However, the listed company also said that in recent years, Feile investment, Yaming Lighting and Feile construction have been in poor operation and are in a state of continuous loss, which has greatly dragged down the overall operation and development of the listed company.
Among them, Feile investment lost 210 million yuan of net profit attributable to its parent company in 2020, 160 million yuan from January to September 2021, Yaming Lighting lost 77.7817 million yuan of net profit attributable to its parent company in 2020, 28.8118 million yuan from January to September 2021, and Feile construction lost 4.5463 million yuan of net profit attributable to its parent company in 2020 and 19700 yuan from January to September 2021.
On January 28, Shanghai Feilo Acoustics Co.Ltd(600651) disclosed the announcement of performance loss in 2021. The net profit of Listed Companies in this year is expected to be about – 420 million yuan, and the net profit after deduction is expected to be about – 407 million yuan.
For the reasons for the loss in advance, Shanghai Feilo Acoustics Co.Ltd(600651) said that due to the overseas covid-19 epidemic, market fluctuations and the sharp depreciation of the euro, the operating revenue of the lighting business segment of the company increased only slightly compared with the previous year. Although the company continued to promote cost reduction and efficiency increase, the estimated loss in 2021 is still about 340 million yuan (including the provision for impairment). In addition, as the global sales performance of the lighting business did not meet the management’s expectations, the xiwannian trademark showed signs of impairment. After the company conducted a preliminary impairment test on the trademark, the impairment is expected to be withdrawn by RMB 30 million.
Trying to “return blood”
It is worth mentioning that Shanghai Feilo Acoustics Co.Ltd(600651) will also bear litigation compensation. On November 29, 2021, the Shanghai financial court announced that the compensation for the dispute over Shanghai Feilo Acoustics Co.Ltd(600651) Securities Misrepresentation liability was paid in full to 315 investors participating in the representative litigation through the securities registration and settlement institution, totaling more than 123 million yuan.
According to the announcement of Shanghai Feilo Acoustics Co.Ltd(600651) performance loss in advance, 83 million yuan will be added to the estimated liabilities accrued in 2020 for the dispute cases of Securities Misrepresentation liability originally told the company. It should be noted that the above cases are still under trial, and the amount of claims involved may also change. Shanghai Feilo Acoustics Co.Ltd(600651) said that at present, it is difficult for the company to accurately predict its impact on the company’s profits. The corresponding estimated liabilities will be considered according to the actual trial progress of the case, and the actual amount of compensation shall be subject to the judgment of the court.
For this transaction, Shanghai Feilo Acoustics Co.Ltd(600651) believes that the listed company is expected to obtain a certain return of funds while stripping relevant assets with poor operating conditions, which will help to improve the financial and cash flow difficulties of the listed company and improve the financial and cash flow situation of the listed company.
In the first three quarters of 2021, Shanghai Feilo Acoustics Co.Ltd(600651) cash flow continued to flow out. Among them, the net cash flow from operating activities is -1989.84 million yuan; The net cash flow from investment activities is -61.9392 million yuan; The net cash flow from financing activities was – 257 million yuan.
In addition to selling the loss making lighting business, Shanghai Feilo Acoustics Co.Ltd(600651) also sold its shares in the listed company Shanghai Chinafortune Co.Ltd(600621) . On November 16, 2021, Shanghai Feilo Acoustics Co.Ltd(600651) signed the share transfer agreement with Guosheng assets, which will transfer 63.6745 million shares to Guosheng assets at the price of 16.32 yuan / share, accounting for 6% of the total share capital of Shanghai Chinafortune Co.Ltd(600621) , with a total price of 1.039 billion yuan.
