After a sharp rise of nearly three times in two days, Yongji convertible bonds were suspended for verification.
“Yongji convertible bonds” will be suspended for verification from May 19
On May 18, Guizhou Yongji Printing Co.Ltd(603058) announced that in view of the recent large fluctuations in the price of the company’s convertible bonds, in order to safeguard the interests of investors, the trading of Yongji convertible bonds was suspended for verification since the opening of the market on May 19 upon the application of the company, and the shares of the company were traded normally during the period.
It is understood that Guizhou Yongji Printing Co.Ltd(603058) ‘s convertible corporate bonds have been listed since May 17, with an opening increase of 50%, touching a temporary suspension, and closing up 276.16% on the same day.
From May 17 to May 18, the closing price increased by 290.96% and the cumulative turnover rate was about 160261%; During this period, the company’s share price rose by – 1.38%, and the price change of convertible corporate bonds seriously deviated from the trend of positive shares.
For the reasons for the surge, industry insiders said that the small circulation disk may be one of the main factors. The issuance scale of Yongji convertible bonds is only 146 million yuan. Considering the reasons for the restriction of sales by major shareholders, the circulation market in the final market may be only more than 80 million yuan. Before listing, Yongji convertible bonds were predicted to rise sharply.
individual investors raise the price of Yongji convertible bonds
Shanghai Stock Exchange suspends relevant account transactions
In the afternoon of May 18, the price of Yongji convertible bonds rose rapidly after falling. As of press time, Yongji convertible bonds rose by more than 9% Guizhou Yongji Printing Co.Ltd(603058) rose more than 2%, and the stock once rose more than 8% in early trading.
At noon, the Shanghai Stock Exchange issued a notice on the abnormal trading of Yongji convertible bonds: this morning, some investors had abnormal trading behaviors such as intraday lifting in the process of trading Yongji convertible bonds, which affected the normal trading order of the market and misled the trading decisions of small and medium-sized investors. The Shanghai Stock exchange adopted self-discipline regulatory measures such as suspending account trading for relevant investors in accordance with regulations. The Shanghai Stock Exchange once again reminded investors to pay attention to risks and comply with transactions.
On May 17, the convertible bond market became crazy again. Yongji convertible bonds in Shanghai stock market opened with a top price of 150 yuan, triggering a temporary suspension mechanism. Trading resumed in the last three minutes before the closing, soared by more than 150% again and closed up 276.16% throughout the day.
After hours of the day, Guizhou Yongji Printing Co.Ltd(603058) disclosed the risk announcement of convertible bond trading. As of the closing on May 17, the price of Yongji convertible bond was 376.16 yuan / piece. According to the results, the premium rate of pure debt is 382.72% and the premium rate of equity conversion is 369.4%, which has great valuation risk. Based on the closing price, investors can make a profit of about 3000 yuan.
The announcement said that in the first quarter of 2022, due to the rise in the price of some upstream raw materials of the company, the operating profit of the main printing industry was compressed, and the share income of investment products held by the company was withdrawn. The superposition of the two led to a loss in the net profit of the company’s consolidated statements. If the price of raw materials further rises in the future and the income of investment products held by the company continues to perform weakly, there may be a risk that the future performance will not meet the expectations.
In addition, according to public information, Yongji convertible bonds Guizhou Yongji Printing Co.Ltd(603058) is a regional leading enterprise in the tobacco label industry. The company makes full use of the industrial advantages of tobacco, Baijiu and medicine in Guizhou Province to form a product line focusing on Tobacco Label products and giving consideration to wine boxes and drug packaging. The two wheel drive development of “cigarette label + wine box” has optimized the company’s product structure, reduced the risk of a single product, and formed a new profit growth point.
alert to the risk of speculation in convertible bonds
“Behind the sharp rise in new bonds, there is more capital speculation!” A number of market participants said that the rise of relevant individual bonds was amazing. Behind this surge was more speculation, and the overvaluation lacked sustainability.
Some analysts said that the main reason for the overheating of convertible bonds and individual bonds is the excessive speculation of hot money. Recently, some funds have concentrated on hyping sub new bonds and convertible bonds, and “double high” convertible bonds are common. Hot money began to use the T + 0 trading system within the convertible bond day to hype some small convertible bonds.
On the one hand, because the convertible bond adopts the intra day t + 0 trading system, and there is no handling charge within the day; On the other hand, the Shenzhen Stock Exchange does not have a circuit breaker mechanism for convertible bonds, which will be suspended for 30 minutes when the increase reaches 20%; Trading will be suspended until 14:57 p.m. when the increase reaches 30%.
It should be noted that at present, both the stock scale and incremental scale of the convertible bond market are at a historically high level. At the same time, with the admission of more funds and higher premium, the conversion premium rate of convertible bonds is very high. Once the forced redemption is triggered, the price of convertible bonds will approach the price of positive shares, and the convertible bonds purchased at a high price will bring huge losses.
Many market participants also analyzed that in the speculation of “double high” convertible bonds, due to the agency’s rating and scale of individual bonds or restrictions on the threshold of warehousing, the participation of professional institutions is limited, and most of them are market active funds or retail investors. Such funds are fast in and fast out, and it is easy to become a “catch-up man” to buy after the wind. It is noteworthy that the first day increase of several new bonds listed recently has dropped significantly.
