Operating Losses, Stock Prices Fell To The Warning Line, Snow Lett Equity Pledge Pits The Way Online.

- Oct 29, 2018-

Shellett took the lead in issuing the third quarter's financial report on Oct. 19 among many LED listed companies, but compared with the positive attitude of issuing performance reports, the performance itself is much more negative. According to the announcement, the company's revenue in the third quarter was 181 million yuan, down - 27.85% year-on-year. The net profit attributed to the shareholders of listed companies was a loss of 38.96 million yuan, down 353.67% year-on-year. The company's total revenue in the first three quarters was 536 million yuan, down 23.74% year-on-year. The net profit attributed to shareholders of listed companies was a loss of 55.153 million yuan, down 281.75% year-on-year.——LED lighting


Shellett, now known as the "M&A King" by outsiders for its optical technology applications and key components of new energy vehicles, lost money for the first time since listing in the semi-annual report in 2006, and continued to lose money in the third quarter after continuing the decline in the semi-annual report and because of poor liquidity in the earnings report. Outside concern, the Shenzhen Stock Exchange also sent a letter to ask for reasons.——LED lighting


The difference between cash flow and profit reached 500 million, which attracted the attention of the exchange.


According to public data, Shellett's operating income in 2017 was 1.026 billion yuan, up 26.08% from a year earlier, and the net profit of shareholders of listed companies was 5.587-02 million, up 37.94% from a year earlier. Behind the brilliant performance is the deterioration of other financial conditions, the annual report shows that the net cash flow generated by operating activities - 469 million yuan, down 12,660.37% from the same period last year. Shellett said the net cash flow generated by the company's business activities during the reporting period was - 46,877.61 million yuan, with a net profit of 35.19 million yuan, representing a difference of 50,397.13 million yuan, mainly due to the increase in operating receivables and inventory.——LED lighting


Shellett claimed that the increase in operating receivables was mainly due to the increase in accounts receivable generated by the increase in sales of charging piles in the reporting period, and the increase in accounts receivable was an industry characteristic of charging piles. The increase in inventory is mainly due to the increase in raw materials and accessories purchased by the company during the reporting period. The increase in inventory is a strategic consideration made by the company in response to the positive market demand and fluctuations in raw material prices. In summary, Shellett said that the significant difference between net cash flow and net profit from current business activities was temporary and attributed the difference to business strategy and strategic arrangements, which the company said was reasonable.——LED lighting


Recently, some of Shellett's Fushun Opera bank accounts were frozen at $11.77 million, adding fuel to the fire. Frequent exchanges led to the Shenzhen stock exchange sent a letter to snowet directly.


Subsidiary Fushun photoelectric liquidity is tight, some bank accounts are frozen and assets are seized.


In 2014, snowlett purchased Fushun Optoelectronics in the form of issuing shares and paying cash. According to the 2017 annual report, Fushun Optoelectronics has fulfilled its relevant performance commitments for four consecutive years from 2014 to 2017. Fushun Optoelectronics contributed more than 220 million yuan in revenue in 2017 due to its good operation during the reporting period.——LED lighting


On August 25, Shellett announced that Fujian Provincial Higher People's Court issued a "Civil Ruling", Fushun Photovoltaic part of the assets were seized. The company said that the assets seized by the court is an important asset of Fushun Optoelectronics, currently in a restricted state, can not be used normally.——LED lighting


On October 10, Shellett announced that the funds in four bank accounts of Fushun Optoelectronics Technology Co., Ltd. (hereinafter referred to as "Fushun Optoelectronics") were frozen by more than 30 million yuan. The frozen amount was 11.77 million yuan because the balance of the frozen account of Fushun Optoelectronics was less than the frozen amount.——LED lighting


Fushun photoelectric has been transforming the new energy vehicle charging pile business since 2016. According to the characteristics of the charging pile industry, the charging pile business receipt account period is longer, the average account period is more than one year, which has a greater impact on the daily operating cash flow of Fushun Photovoltaic. In addition, under the influence of the state's de-leveraged monetary policy, Fushun Optoelectronics was partly repaid by the bank in 2018, resulting in liquidity constraints, unable to repay some suppliers on time due payment.——LED lighting


A subsidiary of silver Fook Weiye has been forced to liquidate its shares.


On September 4, Shellett announced that he had received written documents from Chen Jianshun, a 5% shareholder of the company, and Zhangzhou Yinfuweiye Investment Co., Ltd. (hereinafter referred to as "Yinfuweiye"), a concerted actor. He was informed that Chen Jianshun might have the risk of passive reduction. Huachuang Securities Co., the Pledgee of Yinfuweiye, Ltd. The company's shares have been disposed of. The specific circumstances of the passive reduction of Yin Fu Wai are as follows:


By the close of September 4, 2018, Yin Fuweiye had 308,790 shares, or 0.04% of the company's total equity. Before the passive reduction, Yin Fuweiye held 4,983,190 shares of the company, accounting for 0.64% of the company's total equity, all of which were unsold conditional shares.——LED lighting


However, Chen Jianshun, the actual controlling shareholder of Yin Fu Wei Ye, may have liquidated his Shellet shares by the pledgee, resulting in passive reduction. According to the data, Chen Jianshun is the second largest shareholder of the company. He is the director and vice president of the company. He does not belong to the controlling shareholder and actual controller of the company. He holds 83,318,598 shares of Shellet Company, accounting for 10.71% of the company's total equity. Chen Jianshun holds 78,800,000 shares, accounting for 94.58% of the company's total shares, accounting for 10.13% of the company's total share capital; 83,318,598 shares, accounting for 100% of the company's total shares held by him, accounting for 10.71% of the company's total share capital; and the total number of shares frozen in turn. The number of shares is 12,863,172, accounting for 15.44% of the total number of shares held in the company and 1.65% of the total capital stock of the company.——LED lighting


The author consults the data and finds that 78,826,698 Shellett stocks owned by Chen Jianshun are restricted shares, accounting for 94.61% of Shellett stocks held by Chen Jianshun, while the pledged stocks account for 94.58% of the stocks held by Chen Jianshun. It is inferred that most or all of the stocks pledged by Chen Jianshun are restricted shares, so the forced liquidation by the securities firms is not necessary. Its holding company, silver Fook Albert, has been more fortunate than the strong Ping.——LED lighting


The risk of mortgage lending by shareholders and their partners is increasing.


Not only is the liquidity of its subsidiaries tight, but the financial situation of shellet is also not optimistic. In addition to the warning line triggered by the second largest shareholder mentioned above, the controlling shareholders of Shellett and their concerted actors have triggered the default clause.——LED lighting


On September 13, the company announced that Chai Guosheng, the controlling shareholder and the actual controller, had learned that part of the stock pledge repurchase transactions conducted by Huatai Securities Co., Ltd. and Wanhe Securities Co., Ltd. had triggered the default clauses stipulated in the agreement and might be subject to breach of contract. As of the announcement day, Chai Guosheng held 31.37% of the total share capital of the listed company. Huatai Securities may be involved in the implementation of default disposal of 28.35% of Chai Guosheng shares, accounting for 8.9% of the company's total equity; Wanhe Securities may be involved in the implementation of default disposal of 13.52% of Chai Guosheng shares, accounting for 4.24% of the company's total equity.——LED lighting


On the evening of Oct. 18, Shellet further announced that part of the pledged repurchase transactions of shares handled by Wang Yi-yu Huatai Securities, the controlling shareholder and the actual controller of Chai Guosheng, had triggered the default clauses stipulated in the agreement and could be handled for breach of contract. As of the announcement date, Wang Yi held 2.03% of the company's total share capital. Huatai Securities may be involved in the implementation of default disposal of 36.92% of Wang Yi's shares, accounting for 0.75% of the company's total equity.——LED lighting


Shellett also announced on the evening of the 18th that from January to September 2018, the company's assets impairment reserve amounted to 41 million, accounting for 73.38% of the absolute value of the company's audited net profit in 2017, which will reduce the company's owner's equity and net profit of 41 million in the first three quarters of 2018. The major reason for the large asset impairment is that the credit policy period of some product lines is longer, which leads to a longer age of accounts receivable.——LED lighting


It is also affected by this impact, in the first 9 months of 2018, net profit fell sharply compared to the same period last year.


Mr. Chai Guosheng, the controlling shareholder of the company, together with Mr. Wang Yi and Mr. Chai Hua, the concerted actors, held 261,784,606 shares of the company, accounting for 33.65% of the company's total capital stock. Among them, 76,831,703 shares were under unlimited conditions, accounting for 29.35% of the company's shares. The number of shares involved in default was close to that of shares because of default. It happened in September, before the relevant departments have called for the securities firms to forcibly liquidate the unlimited sale of conditional shares, so it can not rule out the possibility that defaulted shares have been forced to liquidate the securities firms.——LED lighting


To make matters worse, Mr Chai pledged his shares on May 18, 2017, and then on February 2, 2018, February 5, 2018 and August 31, 2018, respectively. The shares of the company held by Mr Chai and his concerted actors were pledged to 249,250,000 shares, accounting for the total number of shares held by the three persons. 95.21%, accounting for 32.04% of the total share capital of the company. As can be seen from the Shellett Stock Day K, since May 29, 2018, Shellett's share price has continued to decline, from 6.44 yuan / share to 3.36 yuan / share (closing on October 26, the middle once fell to 3.15 yuan / share), the stock price has been cut.——LED lighting


The company's revenue and net profit both declined, the majority of the controlling shareholders have been pledged, in case the share price continues to decline, Shellett to fill the hole in the pledge of equity?——LED lighting



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