With the share price of the semiconductor sector depressed this year, Sanan Optoelectronics Co.Ltd(600703) ( Sanan Optoelectronics Co.Ltd(600703) ) also hit a new low of 20.34 yuan / share on April 12. On that day, the listed company offered a large repurchase.
On April 12, Sanan Optoelectronics Co.Ltd(600703) announced that it planned to repurchase shares with its own funds or self raised funds, with the repurchase amount not less than 500 million yuan (inclusive) and not more than 800 million yuan (inclusive). The repurchase price shall not exceed 30 yuan per share, and the repurchased shares shall be used to implement the employee stock ownership plan or equity incentive plan.
As for the reasons for the repurchase, Sanan Optoelectronics Co.Ltd(600703) said that based on the confidence in the company’s future development prospects and the judgment of fundamental value, the company comprehensively considered the recent stock price performance of the company, combined with the company’s operation, financial status and future development prospects, effectively safeguarded the interests of shareholders, enhanced investor confidence, encouraged employee morale and promoted the long-term development of the company. The company plans to repurchase shares.
Looking back, Sanan Optoelectronics Co.Ltd(600703) previously successfully launched the employee stock ownership plan. Taking last year as an example, the fourth phase of employee stock ownership plan of San’an North Electro-Optic Co.Ltd(600184) Co., Ltd. (Draft) was issued in September, and the fourth phase of employee stock ownership plan with a total amount of no more than 1.6 billion yuan was successfully purchased in December of that year. However, with the continuous decline of the share price of San’an radio and television, it is difficult to be optimistic in the short term.
Since Sanan Optoelectronics Co.Ltd(600703) disclosed the annual report on April 26, the specific financial data of the company’s operation last year are still unknown. However, in the previous three quarters, the revenue of more than 9.5 billion yuan and the net profit of nearly 1.3 billion yuan have achieved a significant year-on-year increase.
Moreover, judging from the current disclosure, the business condition of Sanan Optoelectronics Co.Ltd(600703) is also booming. Just in March this year, the company also announced that since the beginning of 2022, the company has continuously received purchase orders for mini LED chips from a single major international customer, with an amount of more than 170 million yuan, of which about 100 million yuan has been delivered from January to February 2022, and the remaining amount will be delivered to customers in March. To meet customers’ chip demand in March.
So why does Sanan Optoelectronics Co.Ltd(600703) share price continue to decline?
One of the reasons is related to the general trend. Since April, the semiconductor sector as a whole has shown a unilateral downward trend Semiconductor Manufacturing International Corporation(688981) and other stocks recently hit a new low since listing.
Accompanied by the downturn of Sanan Optoelectronics Co.Ltd(600703) share price, the number of shareholders of the company increased significantly. Since 2018, when the number of shareholders of the company exceeded the integer threshold of 100000 for the first time, Sanan Optoelectronics Co.Ltd(600703) shareholders continued to disperse. By the end of September 2021, the number of shareholders of the company had exceeded 330000.
In the face of the huge base of shareholding groups, Sanan Optoelectronics Co.Ltd(600703) ‘s share price downturn has also attracted market attention. In mid April alone, a number of investors asked the company’s board secretary on the interactive platform: “does anyone in the company care about the stock price now? Does anyone in the board of directors protest against the fixed increase now?” “Will the company protect the company’s share price? Will it increase the share price by buying back shares? At present, the company’s share price has fallen by more than half. Will this rescue measure be taken now?” Wait.
Secondly, it is not excluded that it is related to the reduction of some shareholders. Taking large funds as an example, in March this year, Sanan Optoelectronics Co.Ltd(600703) once received a notification letter from the shareholders of large funds. From October 2021 to early March this year, large funds reduced their holdings of 447934 million shares through centralized bidding, with a reduction ratio of 1%. After the reduction, the shareholding ratio of large funds decreased from 8.29% to 7.29%.
In addition, some investors believe that it is also related to the fixed increase financing of the company. Last September, Sanan Optoelectronics Co.Ltd(600703) once disclosed the fixed increase plan, which planned to raise no more than 7.9 billion yuan, which will be used for the mini / micro display industrialization project of Hubei Sanan Optoelectronics Co.Ltd(600703) Co., Ltd. and supplement working capital.
According to the announcement at that time, the total investment of Hubei San’an project was 12 billion yuan, including 10.257 billion yuan in fixed assets, 1.743 billion yuan in initial working capital, and 6.9 billion yuan in raised funds, including 6.1 billion yuan in fixed assets. The construction period of the project is 5 years, the production period is 8 years, the expected internal rate of return is 13.67% (after tax), and the investment payback period is 4.11 years. After the completion of the project, the production of mini / microled gallium nitride chip, mini / microled gallium arsenide chip and 4K display packaging is one of Sanan Optoelectronics Co.Ltd(600703) the core strategic plans in the field of high-end LED.
In this regard, some investors pointed out on the interactive platform that ” Hc Semitek Corporation(300323) and other enterprises will only increase by 1.9 billion. Why does Sanan Optoelectronics Co.Ltd(600703) need 7.9 billion?” Some investors suggested that “the fixed increase should be cancelled and convertible bond financing should be issued instead”.
Fixed increase financing in the left hand and repurchase with money in the right hand. Whether Sanan Optoelectronics Co.Ltd(600703) can reverse the decline of share price under “mutual Expo” remains to be answered in time.
