Can Crystal Optoelectronics, With 41 Million Shares Decompressed By State-owned Enterprises In Hand, Become A Model Rescue Stock

- Dec 10, 2018-

On the evening of November 19, Zhejiang Taizhou Star Enterprise Crystal Optoelectronics (002273) announced that Star Group Co., Ltd. (hereinafter referred to as "Star Group") shareholding dropped from 19.52% to 11.06%, still a controlling shareholder. Taizhou Nongyin Phoenix Jingui Investment Partnership (Limited Partnership) (hereinafter referred to as "Nongyin Phoenix Jingui") with the background of state-owned assets, has jumped to two shareholders with 8.46%, and both sides will move forward and backward as concerted actors. The capital market is attracted by the entrepreneurs of local state-owned capital.——LED Christmas light


On December 5th, half a month after joining hands with state-owned enterprises, Crystal Optoelectronics issued a notice on the dissolution of pledge of shares. According to the announcement, the total number of shares released from pledge was 4,108.69.98 million, the pledge rate dropped from 93.45% to 69.05%, and the pledge returned to the high-risk line of pledge (80%). As of December 3, Star Group held 168,398,907 shares of the company, accounting for 19.52% of the company's total equity.——LED Christmas light


Details of bail-out funds landing


On November 15, as the only state-owned financial holding platform in Taizhou, Taizhou Financial Investment Co., Ltd. (hereinafter referred to as "Taizhou Golden Investment") issued 500 million yuan of "special debt for relief" on the Shanghai Stock Exchange, which is the first "debt relief" investment project in Zhejiang. All the above-mentioned funds flow into Taizhou "Special Fund for the Steady Development of Listed Companies" to support local A-share listed companies with good geology to resolve liquidity difficulties such as equity pledge.——LED Christmas light


In the Promotional Notice on Controlling Shareholders'Agreement to Transfer Part of the Company's Equity on November 19, Crystal Optoelectronics and Agricultural Silver Phoenix Jingui disclosed in detail the details of the agreement on the agreement of the unanimous actors, the payment method and the conditions for the transfer of shares. The premise of the transfer is to obtain the approval and consent of Taizhou Municipal Government. On this basis, Star Group will open a regulatory account in accordance with the Capital Supervision Agreement. In addition, a total of 732 million yuan of equity transfer funds, the other side of the transaction, Nong Yin Fenghuang Jingui, is also based on conditions to pay in three steps.——LED Christmas light


The first advance payment of 50 million yuan is made within one working day of the opening and usability of the above-mentioned regulatory account, and the first transfer of 350 million yuan of equity is completed within nine working days of the arrival of the amount in the regulatory account by Star Group; and the second transfer of equity is completed in full. The transfer will arrive by December 25 at the latest. Within 30 working days after the transfer, Nongyin Phoenix Jingui has the right to appoint a director to the board of directors of listed companies.——LED Christmas light


Performance is the primary consideration in securing bailout funds


Taizhou authorities have told the media that a number of project libraries have been sorted out for firms with stable operation, no credit default but difficult liquidity. Next, they will discuss docking one by one. The Taizhou municipal government also arranged several local state-owned platforms such as Taizhou Jintou and Taizhou Guotou to visit local enterprises one by one for comprehensive assistance.——LED Christmas light


According to the rescue projects that have landed one after another, it can be seen that rescue is the criterion of investment projects of the rescue fund.


At the company level, crystal optoelectronics, as the leading optical device in China, achieved revenue of 1.63 billion yuan in the first three quarters of 2018, an increase of 7.67%, net profit of 404 million yuan, an increase of 49.7% over the same period of last year. Under the overall downward situation of the real economy, its performance is quite impressive. At the group level, it puts forward the idea of "creating 100 billion groups, building up" According to the financial statements of the first quarter of 2018, Star Group has total assets of 24.95 billion yuan, total liabilities of 15.25 billion yuan and operating income of 2.81 billion yuan.——LED Christmas light


In addition, according to public information, as early as January 29, 2015, Taizhou Jintuo and Zhejiang Industrial Bank launched a total of 800 million yuan of Taizhou Industrial Transformation and Upgrading Fund, which has locked in crystal optoelectronics, Xianchen Pharmaceutical, Huashu Media Oriented Additional Projects. Past cooperation has also become one of the important factors for the government to refer to.——LED Christmas light


summary


According to the design willingness of the state authorities, the aim of relief should not be to seek the control of enterprises, but to help the high-quality enterprises with short-term liquidity risk to ease the pressure of funds. The landing of individual projects before that also appeared to be a bit of a downfall because of the change of control rights, which triggered a certain degree of controversy. It is also easy to lead to over-interpretation of the market.——LED Christmas light


The state-owned enterprises help enterprises mitigate short-term liquidity risk by taking shares. After taking shares, the state-owned enterprises become the second largest shareholder of Crystal Optoelectronics. Among them, the selection of rescue objectives, agreement of concerted actors, payment methods, transfer conditions of equity and other transaction details, on the one hand, can ensure that special funds are dedicated to solve the urgent needs of enterprises, on the other hand, through equity ownership can also improve the company's equity structure, for the subsequent rescue fund landing, it is a universal reference. Significance is conducive to the promotion of subsequent relief projects.——LED Christmas light


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