At present, the total market value of Guangdong Guoli Sci&Tech Co.Ltd(300716) is only 1.475 billion yuan, but the controlling shareholders want to reduce their shares by no more than 10%. Is it because the controlling shareholders are too short of money or the market value of the company is still not cheap?
Since its listing at the end of 2017, Guangdong Guoli Sci&Tech Co.Ltd(300716) performance has continued to decline and no less fund-raising, but there are pitiful dividends and the stock price has also continued to decline. The only benefit is the major shareholders who continue to reduce their holdings. In this way, Guangdong Guoli Sci&Tech Co.Ltd(300716) is more like a cash out tool for major shareholders.
Guangdong Guoli Sci&Tech Co.Ltd(300716) the controlling shareholder currently holds 40.78%. If the reduction of 10% is completed, its shareholding will be reduced to 30.78%. The controlling position is no longer absolute. If it is further reduced in the future, it is possible to be acquired by other funds. Now the major shareholders still insist on reducing their shares. There can only be two reasons. One is that the major shareholders are seriously short of money, and the other is that the major shareholders believe that the current stock price is too high to retain the controlling right.
From the company’s past performance, the attributable net profit reached a new high in the year of listing in 2017, and then continued to decline from 2018. By 2020, the company had a direct huge loss of 317.3 million yuan. All profits in these years were not enough for this year’s loss. The company lost 57.24 million yuan in the first three quarters of 2021, and the loss after deduction increased to 94.41 million yuan.
From Guangdong Guoli Sci&Tech Co.Ltd(300716) the balance sheet by the end of the third quarter of 2021, the company’s book monetary capital is 145.7 million yuan, but the current liabilities are more than 1 billion yuan, that is to say, the company’s cash assets are not enough to repay the current liabilities. Although the company also has 451.6 million yuan of accounts and notes receivable, there may be a risk that these accounts receivable will not be recovered.
In addition, the company has more than 300 million yuan of inventory, and the difficulty of realizing these inventories also exists. The company’s total assets are 1.86 billion yuan, of which accounts receivable and inventory account for 750 million yuan, indicating that the company’s operating ability is poor, and the huge current liabilities also test the company’s solvency.
Therefore, this column says that Guangdong Guoli Sci&Tech Co.Ltd(300716) is short of money, but the major shareholders did not mention to lend the funds obtained from the reduction to the listed company for free. So, do major shareholders want to cash in and save listed companies, or do they want to cash in as much value as possible while the stock price is still high?
The stock price of Guangdong Guoli Sci&Tech Co.Ltd(300716) is still high, mainly because according to its fundamentals, the company has a net asset of 2.8849 yuan per share and a performance loss, but the stock price is above 9 yuan. From the perspective of value investment, the company’s stock price is not low, so this is also the second reason for the reduction of major shareholders worried about in this column. That is, in the view of major shareholders, the current stock price is still quite high, and the value of the controlling right can not offset the high price of the stock, so we should try our best to reduce our holdings. After all, if the company loses performance in the future, is ST or even delisted, the shareholding of major shareholders will not be of great value. The current distribution at high prices is absolutely the right idea.
After the investors helped the major shareholders to achieve the victory and escape, once the company’s performance continues to decline, what can investors do to deal with it? From the historical experience, the coping strategies of small and medium-sized investors are relatively passive, and they can only accept or give up. With declining performance and falling stock prices, investors have no choice but to cut meat or be trapped. Therefore, if major shareholders continue to reduce their holdings of shares, investors should seriously think about what is the motivation behind the reduction of major shareholders’ holdings of shares, and whether they should act as “takers”.
(Beijing business daily)
