Recently, Ningbo Cixing Co.Ltd(300307) disclosed that it planned to sell 35% equity of northern Guangwei acquired at a premium more than a year ago. However, Ningbo Cixing Co.Ltd(300307) two Directors voted against it, and the sale decision also attracted regulatory attention.
Behind it, more questions emerged. The “former prospective owner” of Ningbo Cixing Co.Ltd(300307) was recommended, and the opposing directors were all from the background of the former prospective owner. In the first year of acquisition, the performance of northern Guangwei changed from profit to loss. In addition, because CNR Guangwei did not cooperate with the evaluation institution appointed by Ningbo Cixing Co.Ltd(300307) to conduct the evaluation, the transfer pricing was still based on the previous evaluation report, that is, the subject party itself did not recognize the sale alone.
According to the interview with the reporter of securities times · e company, although Ningbo Cixing Co.Ltd(300307) has been the largest shareholder of North Guangwei, it has not participated in the operation and management of the company and is relatively passive in management.
In the view of the outside world, Ningbo Cixing Co.Ltd(300307) has encountered the “sequelae” of M & A. looking back, the starting point of the current situation is that the company planned to “change ownership” at the beginning of last year. The actual controller of Ningbo Cixing Co.Ltd(300307) originally planned to transfer the controlling right to Chen xuanlin, a Zhejiang businessman. However, it backfired. Since the termination of the fixed increase at the end of last year, Chen xuanlin showed his intention to retreat, and the shareholding ratio was rapidly reduced to less than 5%. The “breakup” between the two sides has also become an important background for Ningbo Cixing Co.Ltd(300307) eager to peel off northern Guangwei.
against directors: “will the decision-making be hasty?”
Ningbo Cixing Co.Ltd(300307) announced on April 19 that it planned to transfer 35% equity and corresponding creditor’s rights of northern Guangwei with RMB 148 million, and Ningbo Cixing Co.Ltd(300307) controlling shareholder was the transferee. However, in the resolution of the board of directors held on the same day, Cao Li and Yan Haoyang, directors of the company, expressed their objections. Finally, the proposal was adopted by “6 in favor, 2 against and 0 abstention”.
The reporter learned from Ningbo Cixing Co.Ltd(300307) that the sale proposal still needs to be considered and approved by the general meeting of shareholders because it involves related party transactions, and will be considered together at the annual general meeting of shareholders.
why did two directors vote against it
“Last year, when Cixing purchased 35% equity of northern Guangwei, it was preparing to layout related industries (infrared night vision imaging industry) , we feel that the company has entered a new industry. Will the time from purchase to sale be particularly short? Will investment decisions be hasty? In addition, the evaluation still follows the report on April 16 last year. It has been more than one year since the board of directors was held this year. Is it unreasonable not to reassess it? ” Ningbo Cixing Co.Ltd(300307) director Yan Haoyang told the reporter of securities times · e company.
Yu Weilai bought for the North last year. In January 2021, sun Pingfan, the actual controller of Ningbo Cixing Co.Ltd(300307) and his enterprises signed a letter of intent with Guangwei Zhuhai and Chen xuanlin. Guangwei Zhuhai plans to acquire the control of Ningbo Cixing Co.Ltd(300307) through the combination of “agreed transfer of shares + subscription of fixed increase shares + subsequent increase or decrease of holdings by both parties”. After the transaction is concluded, Chen xuanlin, a Zhejiang businessman, will become the actual controller of the listed company. Chen xuanlin’s core platform is Guangwei holdings, which has repeatedly appeared in the capital market in recent years, and has indirectly strategically taken shares in Shang Gong Group Co.Ltd(600843) , Suzhou Hycan Holdings Co.Ltd(002787) and other companies.
Subsequently, on February 3, 2021, Ningbo Cixing Co.Ltd(300307) disclosed that it planned to acquire 35% of the equity of North Guangwei jointly held by Kunming Institute of physics and North Night Vision Technology Research Institute Group by means of public delisting, with a transfer reserve price of 140 million yuan. One month later, the company completed delisting.
The announcement shows that the northern Guangwei system is recommended by Guangwei Zhuhai. In addition, northern Guangwei is also an enterprise held by Chen xuanlin. Its Guangwei holding holds 28.65% of the equity of northern Guangwei.
In other words, Ningbo Cixing Co.Ltd(300307) carried out this connected transaction during the “change of ownership” step.
At that time, Ningbo Cixing Co.Ltd(300307) said that taking the opportunity of acquisition to enter the infrared night vision imaging industry would help the company expand new fields and bring new performance growth points.
However, in this sale, Ningbo Cixing Co.Ltd(300307) is interpreted as “in view of the fact that the company has terminated issuing shares to specific objects in December 2021 and the company has some difficulties in managing the target company, in order to protect the interests of minority shareholders and better focus on the main business.”
Why did the development strategy of Ningbo Cixing Co.Ltd(300307) change significantly after only one year before and after
“The target itself is recommended by them (Guangwei). Later, the company found it difficult to manage, including the termination of fixed growth. The two sides also have differences in planning.” The reporter previously called Ningbo Cixing Co.Ltd(300307) , said a person from the company’s securities affairs department.
Are there differences between directors / shareholders on the company’s future strategy? “We are only aiming at this transaction. As a director, we raise our own doubts and fulfill the obligation of diligence. There is no other meaning.” Yan Haoyang, who cast a negative vote, told reporters.
“step by step” master change plan failed
It is worth mentioning that the above-mentioned two directors who cast a negative vote were nominated by Chen xuanlin, who originally planned to take over the post, and began to serve as the directors of Ningbo Cixing Co.Ltd(300307) in May last year.
Back to the beginning and end of the event, the sale is the chain reaction after the failure of Ningbo Cixing Co.Ltd(300307) “change of ownership”.
In January 2021, Ningbo Cixing Co.Ltd(300307) controlling shareholder planned the transfer of controlling shares and reached a “step-by-step” complex arrangement with the transferee.
Specifically, Guangwei Zhuhai under Chen xuanlin plans to transfer 5% of the shares held by sun Pingfan, the actual controller of Ningbo Cixing Co.Ltd(300307) for 507 million yuan, and pay 234 million yuan for the first phase of share transfer.
Meanwhile, Guangwei Zhuhai plans to subscribe Ningbo Cixing Co.Ltd(300307) no more than 234 million fixed increase shares at a price of 4.59 yuan / share, at a cost of about 1.075 billion yuan.
In order to ensure the actual control of Guangwei Zhuhai, sun Pingfan also promised to choose the opportunity to reduce the total holding of 4.92% shares in the next six months, while Chen xuanlin and Guangwei Zhuhai promised to choose the opportunity to increase the total holding of 2% shares in the next six months.
If all the transactions are concluded, the shareholding ratio of Guangwei Zhuhai will reach 28.46%, the shareholding ratio of sun Pingfan will be reduced to 22.9%, and Chen xuanlin will be promoted to the new actual controller.
Subsequently, during the planning of fixed increase, Ningbo Cixing Co.Ltd(300307) acquired the equity of northern Guangwei recommended by Chen xuanlin. At the same time, listed companies make coordination and adjustment at the high level of directors and supervisors.
In April 2021, Guangwei Zhuhai nominated Yan Haoyang and Cao Li with Guangwei holding background as Ningbo Cixing Co.Ltd(300307) directors.
At the same time, sun Haohan and Xu Zhihan, who also have the background of Guangwei holdings, are nominated to serve as the joint general manager and joint chief financial officer of Ningbo Cixing Co.Ltd(300307) respectively.
It is worth mentioning that sun Haohan was also elected as the chairman of northern Guangwei in March. This also foreshadowed the lack of control of listed companies over northern Guangwei. At that time, Ningbo Cixing Co.Ltd(300307) declared that “appointing directors to North Guangwei can have a significant impact on the production and operation of North Guangwei.”
Finally, the transfer of controlling shares did not perform as expected. On December 7, 2021, Ningbo Cixing Co.Ltd(300307) announced the termination of the above-mentioned fixed increase for the reason of “comprehensively considering the actual operation and future development strategic planning of the company”. In addition, Ningbo Cixing Co.Ltd(300307) lowered the transfer price of the previous agreement of Guangwei from 507 million yuan to 234 million yuan.
As a key step in the transfer of control, the termination of the above fixed increase also means the failure of the “change of ownership”. Due to the termination of the fixed increase, sun Haohan and Xu Zhihan also resigned from the positions of Ningbo Cixing Co.Ltd(300307) joint general manager and joint chief financial officer respectively.
It can also be seen from the equity change that Chen xuanlin has gradually changed from a “prospective owner” to a “former prospective owner”. On February 8 this year, Chen xuanlin threw out a plan to reduce his holdings of Ningbo Cixing Co.Ltd(300307) due to capital demand. From March 10 to March 17, through centralized bidding and block trading, Chen xuanlin reduced Ningbo Cixing Co.Ltd(300307) 15610900 shares, and the shareholding ratio was accurately reduced to less than 5%. This also means that if it subsequently reduces its holdings, it does not need to be disclosed.
the authenticity of the performance of North Guangwei was questioned
It is worth mentioning that in January this year, another A-share company Beijing Fjr Optoelectronic Technology Co.Ltd(688272) also showed interest in northern Guangwei.
Beijing Fjr Optoelectronic Technology Co.Ltd(688272) announced on January 10 that the company signed an intention agreement with northern Guangwei and Guangwei holdings to increase capital to northern Guangwei and transfer part of the equity of northern Guangwei held by Guangwei holdings, so as to achieve the purpose of holding 10% equity of northern Guangwei. The specific transaction price has not been determined, but all parties agree that the pre investment valuation of the target company shall not exceed 420 million yuan.
However, it has been more than three months since the announcement was disclosed, and there has been no substantial progress in the above investment matters.
the reporter called Beijing Fjr Optoelectronic Technology Co.Ltd(688272) and the staff said, “no further promotion has been made at present. The company will describe the investment in the first quarterly report”
In addition, the reporter noted that according to the financial data disclosed by Beijing Fjr Optoelectronic Technology Co.Ltd(688272) disclosure, the operating revenue of North Guangwei in the first half of 2021 was 31.374 million yuan and the net profit was 6.9495 million yuan.
The Ningbo Cixing Co.Ltd(300307) 2021 semi annual report shows that in the first half of last year, northern Guangwei achieved a revenue of 186323 million yuan and a net profit of 1.1354 million yuan.
In fact, when Ningbo Cixing Co.Ltd(300307) announced the acquisition of shares of northern Guangwei initially, the latter’s volatile financial performance has attracted attention.
The net profits of northern Guangwei in 2018, 2019 and the first half of 2020 were -1559000 yuan, – 8672800 yuan and -4224300 yuan respectively. However, in the second half of 2020, the company reversed the loss situation in one fell swoop and finally realized a profit of 221244 million yuan.
Based on the above growth trend, the evaluation organization adopted the income method for evaluation, and Northern Guangwei obtained an overall valuation of 421 million yuan, with a value-added rate of nearly 70%.
North Guangwei is a manufacturer of infrared detectors. At that time, the evaluation report said that with the finalization and supply of military products, it is expected that the revenue will maintain a good growth trend in the future; On the other hand, the infrared thermal imager industry is in the stage of rapid development, which will provide good production conditions for mass production.
However, in the first year after Ningbo Cixing Co.Ltd(300307) completed its investment, CNMI suffered losses again.
“There are also exchanges between the company and the firm. Northern Guangwei is an associated company. In fact, the (sale) has little impact on us. Moreover, according to the data previously provided by the other party, northern Guangwei also lost money in 2021.” The aforementioned Ningbo Cixing Co.Ltd(300307) staff said.
According to the financial data provided by northern Guangwei on January 28 this year, northern Guangwei realized an operating revenue of 564289 million yuan in 2021, a year-on-year decrease of more than 40%, and the net profit turned from profit to loss to -134027 million yuan.
According to Ningbo Cixing Co.Ltd(300307) , the subject party did not provide corresponding financial statements or cooperate with the audit of the evaluation institution in the sale of the equity of northern Guangwei.
Although Ningbo Cixing Co.Ltd(300307) believes that the operating conditions of the subject company have not changed significantly since the issuance of the previous evaluation report, the regulators still question the financial data of North Guangwei and require Ningbo Cixing Co.Ltd(300307) to respond to the reasons and rationality of North Guangwei’s failure to cooperate with the evaluation, and whether the company can obtain the financial data of North Guangwei and ensure the authenticity and accuracy of the data.
For the doubts about the sale, the Shenzhen Stock Exchange also asked Ningbo Cixing Co.Ltd(300307) to supplement the reasons for the initial acquisition of the equity of northern Guangwei and the transfer of relevant creditor’s rights; Whether the acquisition was reasonably demonstrated and carefully planned at that time; The rationality of selling the equity of northern Guangwei after acquisition in a short time, and the reasons and rationality of transferring to the controlling shareholder. And directly “torture” – whether there is a related relationship or other interest arrangement between the controlling shareholder and the counterparty at the time of acquisition.
On April 22, Ningbo Cixing Co.Ltd(300307) said that it was actively organizing relevant personnel to implement the issues involved in the letter of concern one by one, and would postpone the reply to the letter of concern.
