ST iKang was officially suspended, the actual controller ran away with 2 billion yuan, and where did the 280,000 retail investors go?

Data Ape

2024-06-19 14:41Posted on the official account of Inner Mongolia Data Ape

On June 18, 2024, after 31 consecutive falling limits, Zhejiang iKang Holdings (ST iKang) is now empty. It was even photographed that only two employees of the company left the office building during off-duty hours, and office equipment continued to be moved, including safes, computers and printers. What is embarrassing is that the authorization certificate of Akcome New Energy was casually discarded in the trash.

For the continuous fall limit, ST iKang issued an announcement, saying that ST shares will be suspended from the opening of the market on June 19 (Wednesday).

The snake rode the fog and eventually turned into dust. Starting from May 6, 2024, as a leading enterprise in photovoltaics, it has now become a green staircase.

ST iKang's stock price closed at $0.37 on June 18, 2024, down $0.02, or 5.13%, from the previous day's closing price. The company's total share capital is 4.48 billion shares, with a total market value of 1.657 billion yuan, and the outstanding share capital is 4.476 billion shares, with a circulating market value of 1.656 billion yuan.

The reason for iKang's fall limit is very simple, it can't continue to operate.

From a financial point of view, ST Elken's performance in the first quarter of 2024 was not ideal. The company's net profit was negative, about -233 million yuan, and earnings per share were also negative, at -0.05 yuan. The company's total assets were 104.53 billion yuan, while liabilities reached 83.72 billion yuan. In addition, the company's price-to-earnings ratio (dynamic) and price-to-earnings ratio (TTM) are both loss-making, and the price-to-book ratio is 0.90, indicating that the company's current financial situation is relatively difficult.

Elken's net loss for three consecutive years, as well as the large guarantees provided to the companies inside and outside the consolidated financial statements, also added to the company's financial burden.

Although on May 24, 2024, the China Securities Regulatory Commission (CSRC) issued the "Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies" (hereinafter referred to as the "Administrative Measures for Shareholding Reduction"), which aims to strictly regulate the shareholding reduction behavior of shareholders. The Measures for the Administration of Shareholding Reduction stipulate that major shareholders shall not reduce their holdings in the event of major violations, for example, major shareholders who are under investigation or punished shall not reduce their holdings within the corresponding period.

However, iKang's problems are still caused by the reduction of major shareholder Zou Chenghui.

Zou Chenghui, the actual controller of the company, and his family held 43.63% of the company's shares in the early days of listing, but since 2017, they have continued to reduce their holdings, accumulating about 2.054 billion yuan in cash. By the end of March 2024, Zou Chenghui will only hold 6.4% of the shares through four companies including iKang Group, and the remaining shares will basically be pledged. perfectly avoided the "Measures for the Management of Shareholding Reduction" and ran away with the money.

Although ST iKang and the actual controller Zou Chenghui have been investigated by the China Securities Regulatory Commission on suspicion of illegal information disclosure. However, this cannot change the fact that the shareholders of ST Akon's 276,800 households were displaced and killed by their grandmothers.

The new three can't help iKang?

At the beginning of 2023, the General Administration of Customs proposed a concept called "New Three Things". It refers to three products: electric vehicles, lithium batteries, and photovoltaic products, which are in line with the direction of global green and low-carbon development and are an important force for the growth of China's foreign trade. The new three things can also be said to be the concrete manifestation of the new quality of productivity, symbolizing China's economic transformation.

As we talked above, iKang used to be one of the leading PV leaders in China, with a market value of 27.5 billion yuan at its peak, more than 16 times the market value of iKang today. This market value was the highlight of the PV industry in 2021, and the company's share price tripled in three months to 6.14 yuan per share. It is conceivable that the market value has shrunk to 6% in only three years.

Just put these two things together, no matter how you think about it, he shouldn't end up like this. In addition, OpenAI CEO Sam Altman has publicly stated many times that the end of AI is energy and storage. There is a saying on the Internet, called: standing on the tuyere, pigs can fly.

So iKang can't fly directly to the moon?

However, what is outrageous is that in this context, iKang is still no better, and even worse, which can be called a dou who can't be helped.

In June 2024, the company's wholly-owned subsidiary, Suzhou Akcome Optoelectronics, temporarily suspended production of high-efficiency solar cell module production lines. At the same time, iKang's internal controls and financial reporting have also been questioned by the auditors, who have issued qualified opinions on iKang's 2023 financial reports, which specifically mention significant uncertainties related to going concern. This indicates that the auditor believes that there are significant doubts about whether the company will be able to continue to operate for some time to come.

And that's not all, the auditor also issued a negative opinion on iKang's internal controls. This means that the auditor believes that the company's internal controls are seriously deficient and cannot reasonably guarantee the accuracy, completeness and timeliness of the financial reports.

A while ago, ST Meishang Weibo shouted: "My family has immigrated to Singapore, do you have the ability to arrest me?" The actual controller ran away with the money, leaving a lot of chicken feathers for the Shanghai Stock Exchange and shareholders, but even so, ST Meishang is just a small thing in front of iKang.

What about shareholders?

In 2023, in line with the background of new quality productivity and the state's support for the new three things, iKang proposes to transform from a "professional supplier of solar accessories" to "integrated operation of metal processing, new materials and solar power plants". Zou told investors that he said the transition would allow companies to receive more state subsidies, including financial and social resources.

Naturally, investors also believed his nonsense, and really thought that iKang could eat dividends, so they began to raise and buy the bottom. This has also created a situation where 280,000 shareholders are now trapped by iKang.

I thought that the story of ST Meishang was only once, but now it is good, coincidentally, everyone has begun to learn the practice of Wang Yingyan, the actual controller of ST Meishang, running away. But Meishang only has more than 20,000 shareholders! Shanghai SafBon Water and Chongqing Construction Automobile, which were suspended on the same day as iKang, have more than 30,000 shareholders plus one piece.

It is true that even if the stock is suspended, there are some circumstances in which the stock can be sold or bought through the over-the-counter (OTC) market. But do you think iKang can resume trading? Or do you think Elken can reorganize? Obviously, these 280,000 displaced shareholders are difficult to digest.

A large number of shareholders may feel worried and uneasy, and this sentiment may ripple through the market as a whole, affecting the confidence of other investors. At present, the Shanghai Stock Exchange is struggling around 3030, and just two days after it came back from 3013 in April, there was an iKang incident. If the number of people is smaller, it will affect a certain sector at most, but now this base, maybe even the Shanghai Stock Exchange will have to shake it.

The turmoil that 280,000 shareholders can cause may not only be this, but all walks of life may be affected.

Shareholders' money is also money, how can it be said that people will run away with it? With such things happening again and again, how can we talk about investors' trust in the stock market and regulators?

Moreover, the suspension of iKang's trading may infect other stocks in the same sector, so that shareholders of other stocks will start to be afraid and then retreat. It is not only not conducive to industry financing, but also to the stock market itself. The lack of supervision of iKang is like shooting yourself in the foot.

It's ST iKang today, who will it be tomorrow? According to the regulations of the securities market, when the daily closing price of a company's shares is lower than $1 for 20 consecutive trading days, the delisting mechanism will be triggered. In this case, trading in the company's shares will be suspended, and the shares will be delisted directly after the decision to terminate the listing is made.

Clearly, Elken is not alone. On April 30, 2024, ST Changkang disclosed in its annual report that the controlling shareholder Changjiang Runfa Group Co., Ltd. and its affiliates occupied the company's funds through various ways for non-operational purposes, and as of the date of issuance of the 2023 annual audit report, the balance of capital accounted for was as high as 3.625 billion yuan. This led to a deterioration in the company's financial condition, and the stock price fell sharply, falling for many days. As of June 18, ST Changkang has fallen for 31 consecutive days, and the stock price is 1 yuan per share for 11 consecutive days.

At present, Changkang still has about 45,800 shareholders left.

iKang is the first leading company to suspend trading in the context of the new three, but he is not necessarily the last. With the support of the policy, too many companies rely on the new three things to obtain financing, but shareholders need to be cautious, the new three things are not a golden signboard, and they cannot cover up their own problems.

What shareholders need is openness and transparency. Two months ago, on April 15, Zou Chenghui answered investors' questions on the Shenzhen Stock Exchange, and said that according to the relevant provisions of the "Shenzhen Stock Exchange Stock Listing Rules", the company is not at risk of being delisted. But on May 6, Akcome Technology became ST Akcome. This half a month is a bit too fast for shareholders.

Obviously, there is a complete asymmetry between the information held by the major shareholders and the shareholders, and the information of the shareholders is too backward and the information of the company is not transparent. On the day when the leeks were cleaned, they repeatedly connived at these actual controllers to deceive the stock market and shareholders, how can the securities market be stable for a long time?

The "Measures for the Management of Shareholding Reduction" must be arranged in place, and it must be put in place!

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