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Behind The Termination Of The Refinancing Of 10 Times Shares Chengmai Technology In The Past

2021/9/7 15:19:00 0

Gem

        Chengmai Technology (300598. SZ), once the "big bull stock" of gem, gave up an unsatisfactory half year report after terminating the fixed increase.

Recently, Chengmai technology semi annual report showed that in the first half of 2021, the company realized a revenue of 603 million yuan, an increase of 61.26% year-on-year; The net profit attributable to the common shareholders of the parent company was - 10.2211 million yuan.

      Not long ago, due to changes in the market environment and investors' subscription less than expected, Chengmai technology terminated the refinancing of 1.8 billion yuan after obtaining the approval of the CSRC.

On September 3, the 21st century economic report reporter repeatedly called Chengmai technology's external contact telephone number, trying to understand the relevant information about the termination of refinancing, but none of them answered.

A private equity investor in Shanghai pointed out to reporters that the "failure" of Chengmai technology's refinancing may be due to the high price. "In the early stage, with the name of Huawei concept stock, the stock price rose too much, but the performance was average and very unstable.".

      In the view of industry insiders, the failure of Chengmai technology's fixed increase is related to the company's high share price and poor performance on the one hand, and on the other hand, it also reflects the phenomenon that project supply exceeds demand under the new policy of refinancing, and the fixed increase difficulty of listed companies increases.

Chengmai technology will increase but fail

On the evening of August 25, half a year after obtaining the approval of the CSRC for registration, Chengmai technology announced that it had decided to terminate the fixed increase.

Chengmai technology said that in view of the impact of the changes in the capital market environment, the sudden outbreak of the new crown epidemic in Nanjing, combined with the actual situation of the company and other comprehensive factors, investors' subscription intention was lower than expected, and the number of shares issued corresponding to the subscription amount of this Issuance was less than 70% of the number of shares to be issued this time, After full communication and careful argumentation between the company and relevant parties, the company decided to terminate the issue of shares to specific objects.

Specifically, Chengmai technology believes that the force majeure of Nanjing Lukou Airport's new crown pneumonia epidemic has greatly affected the communication and subscription between the company and the intermediary institutions and investors, and at the same time, the capital market related industries and the stock trend of the company have also changed greatly, which eventually led to this decision.

According to the public data, Chengmai technology was established in Nanjing, Jiangsu Province in September 2006. It is an information technology service enterprise focusing on Intelligent interconnection and intelligent operating system software development. Its main business model is to provide outsourcing services to other software enterprises. The company's main customers include Huawei, Intel and other leading companies, which successfully landed on the gem in January 2017.

On May 7, 2020, Chengmai Technology Co., Ltd., whose share price has been soaring, announced the "A-share stock plan of non-public Development Bank", which opened the rough road of fixed increase.

According to the document, Chengmai technology plans to raise 1.807 billion yuan this time, which will be used for the construction of "application software development kit and migration service project based on domestic operating system" (hereinafter referred to as "domestic operating system project") and "software platform development project for intelligent network connected vehicle operating system".

It is worth noting that at that time, Chengmai technology's share price soared due to the label of "Huawei concept stock". However, the technical barrier of software outsourcing service itself was not high. The "domestic operating system project" that it planned to invest about 991 million yuan for research and development was once questioned because of its big difference with the company's traditional business.

Shenzhen Stock Exchange issued inquiry letters on May 8 and September 28, 2020 respectively, questioning the impure purpose of Chengmai technology's fund-raising, required it to further disclose the details of the project, and asked about the necessity of constructing the project and the feasibility of its successful implementation.

After the revision of the plan and repeated risk tips, Chengmai technology obtained the approval of registration issued by the CSRC on February 4, 2021. However, at the board of directors and the extraordinary general meeting held on June 22 and July 8, respectively, two motions were proposed to extend the validity period of the resolutions of the general meeting of shareholders on issuing shares to specific objects.

Nevertheless, the fixed increase, which lasted more than a year, was finally terminated due to the investors' intention to subscribe less than expected.

After half a year of speculation, the bubble finally burst

In addition to the impact of the epidemic, the reasons why investors didn't buy are related to the high stock price of the company's secondary market and the continuous decline of the company's performance.

From September 2019 to March 2020, Chengmai technology's share price soared due to being named as "Huawei concept stock", with the highest price of 271.53 yuan / share (the former recovery price was 353 yuan / share), which once became the second highest price stock in gem after Zhuo Shengwei. In a short period of half a year, the share price has risen 10 times, "super Bull Stock" has shocked the whole A-share market.

But in fact, Chengmai technology is not one of the initiators of open harmony, and it has not directly participated in the construction of Huawei Hongmeng system and the research and development of its core technology. Its stock price soared more like a hype on the concept.

In September 2019, Chengmai technology sold 100% equity of its subsidiary Wuhan Chengmai, and invested with this part of equity evaluation, established and participated in a new company Tongxin software, holding 45% of its equity.

Wuhan shenzhidu, another shareholder of Tongxin software, is mainly engaged in the research and development of domestic operating system software. It is one of the service providers of Huawei Kunpeng platform's first operating system software products. Only this level of connection makes Chengmai technology get the light of "domestic mobile phone operating system" and become a "Hongmeng concept stock" in the eyes of capital.

Subsequently, a number of sellers' institutional analysts actively sang more and gave them "buy" and "strongly recommended" ratings, which promoted the stock price of Chengmai technology upward.

However, accompanied by the high stock price, many of the original shareholders of the company reduced their holdings at high stock prices. From February to the end of December 2020, five major shareholders including Nanjing Debo investment, the controlling party, successively reduced their holdings for 65 times, with a total reduction of 5.86 million shares, with a total cash withdrawal amount of 1.722 billion yuan.

Under the concept of "gaogaoshang", the performance of Chengmai technology has been depressed, and even faced with many problems, such as the decline of net profit, the decline of gross profit margin of main business, and insufficient cash flow.

According to the financial report, "software technology services" business has accounted for more than 70% of the revenue of Chengmai technology since its listing. However, with the rise of human costs and other factors, the company's comprehensive gross profit margin has continued to decline in recent years, from 31.2% in 2017 to 23.31% in 2020.

In addition, the company's service customer's collection speed is becoming slower and slower, and the proportion of accounts receivable is increasing year by year. At the end of 2020, the book balance of accounts receivable is 461 million yuan, accounting for more than 40% of the total assets. This has a serious impact on Chengmai technology's "hematopoietic capacity". In 2018 and 2019, the net cash flow generated by its operating activities was negative for two consecutive years, with a net outflow of 58.27 million yuan and 19.7 million yuan respectively.

Due to the lack of actual performance support, the "bubble" of Chengmai technology will eventually burst. After the peak, Chengmai technology share price fell all the way. By the end of September 3, 2021, the share price of Chengmai technology was 60.15 yuan per share (ex right recovery), which had dropped by about 27% during the year; At present, the total market value is 9.525 billion yuan, which has shrunk by more than half compared with the peak period last year.

Although the decline is huge, but in the view of some investors, the current stock price still has room for overestimation compared with the performance of Chengmai technology.

"According to the company's current P / E ratio, there are more than 120 times, after the resumption of rights, the stock price is more than 60 yuan, my ideal (price) is less than 40 yuan." A retail investor in South China pointed out in an interview.

Termination of fixed increase of several listed companies

It is worth mentioning that in addition to the individual factors of the company, the termination of the fixed increase of Chengmai technology is also affected by the changes in the capital market environment. Since the beginning of this year, the overall performance of the fixed increase market has been poor, and a number of listed companies have failed to raise funds, and nearly 30% of the companies have failed to raise sufficient funds.

According to wind data statistics, with the disclosure date as the statistical caliber, since this year, as of September 5, 158 A-share listed companies have announced the termination plan of fixed increase, including Tianqi lithium, CSG a, zhidu, etc., while the number of listed companies that terminated the fixed increase in the same period of last year was 84. According to calculation, the number of listed companies that have terminated the fixed increase since this year has increased by more than 50% compared with the same period last year.

Among the 158 companies that have experienced termination of fixed increase, many of them have received approval. In addition to Chengmai technology mentioned above, the same is true for HTC new materials and Zoomlion.

In addition, even if it is successfully issued, the situation of raising funds for individual shares since this year is not ideal. According to wind data, as of September 5, 294 listed companies have completed fixed increase or new shares in the A-share market and are about to be listed, raising a total of 412.471 billion yuan, but nearly 30% of the enterprises actually raised less than expected.

Among them, CLP Xingfa only raised 331 million yuan, which was 83.45% lower than the planned amount of 2 billion yuan, and the fixed increase fund-raising amount of Nanhua futures and Zheshang securities also shrank by more than 60%.

This trend is closely related to the oversupply of fixed increase market and the weakening of secondary market share price after the new policy of refinancing.

The new regulations on refinancing issued on February 14 last year have released many restrictions. The reduction of the fixed increase threshold has made the success rate of enterprise issuance increase rapidly, and the project supply has increased significantly. On the one hand, it has activated the fixed increase market and expanded the market scale; But on the other hand, under the condition of limited market capital, it also leads to the situation of oversupply, fierce competition and increasing difficulty of fixed increase issuance.

As the regulatory authorities accelerate the marketization reform of refinancing, most investors choose the inquiry and fixed increase mode with higher marketization degree, which also leads to the discount rate of the issuance price in the refinancing market this year is not high compared with the market price, and even two enterprises have the situation that the issuance price is inversely linked to the closing price of the issuing day. The narrowing of discount rate has further affected the enthusiasm of investors to participate in fixed increase projects. In addition, the overall trend of stock price weakening in the secondary market makes it more difficult for the market-oriented issuance.

"The market capital is limited. It can't be sent out by launching the plan. The competition at the issuing end will be very fierce. Investors should choose companies, so as to differentiate companies with market pressure." A senior investment bank observer in Shanghai pointed out in an interview.

 

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