Stocks and bonds were killed, and Guanghui Automobile sounded the alarm of delisting at face value

雷达Finance

2024-06-23 15:05Posted on the official account of Beijing Radar Finance

Produced by Radar Finance Hongtu Text|Li Yihui Editor|Deep Sea

On the evening of June 20, Guanghui Automobile, a subsidiary of the Guanghui Department built by Xinjiang tycoon Sun Guangxin, issued a suggestive announcement that the closing price of the company's shares on the day was 0.98 yuan per share, lower than 1 yuan for the first time, if from that date, there is a "daily stock closing price of 20 consecutive trading days are lower than 1 yuan", the company's shares and convertible corporate bonds "Guanghui convertible bonds" will be terminated by the Shanghai Stock Exchange due to the forced delisting of the trading class. 

After the announcement, on June 21, the company's share price was directly blocked on the fall limit, at 0.88 yuan per share, with a total market value of 7.246 billion yuan. Looking back on June 2015, Guanghui Automobile landed on the A-share market through backdoor Merro Pharmaceutical, and the highest share price reached 15.73 yuan per share (before the right to reset), compared with the high point, the company's share price has fallen by more than 90%.

In the future, if the stock price falls further, it may bring risks to the huge pledge of Guanghui Group, the controlling shareholder of Guanghui Automobile. As of May 25, 2024, Guanghui Group has pledged a total of 1.655 billion shares of listed companies, accounting for 62.76% of its shares. 

Correspondingly, Guanghui Automobile's performance has fluctuated significantly in recent years, and the company's net profit attributable to the parent company made a profit of 392 million yuan last year after a huge loss of 2.67 billion yuan in 2022, but the net profit margin has fallen to 0.46%. In the first quarter of this year, the company's net profit attributable to the parent company plummeted by 86.61% year-on-year. 

More importantly, the company's debt repayment pressure is not small. As of the end of the first quarter of this year, Guanghui Automobile's short-term borrowings were as high as 30.46 billion yuan, and the monetary funds on the account were only 8.336 billion yuan, and the shortage debt burden was heavy. 

Guanghui Automobile suffered a "double kill of stocks and debts"

After trading on June 20, Guanghui Automobile issued the first risk warning announcement on the possible termination of the listing of the company's shares and convertible corporate bonds. 

According to the announcement, the closing price of the company's shares on June 20, 2024 was 0.98 yuan per share, which was lower than 1 yuan for the first time. According to the relevant rules of the Shanghai Stock Exchange, if the daily closing price of the company's shares is less than RMB 1 for 20 consecutive trading days, the listing of the company's shares may be terminated by the Shanghai Stock Exchange. In addition, the shares of companies that are compulsorily delisted in the trading category will not enter the delisting period for trading. 

At the same time, if the listing of the shares of a listed company is terminated, the listing of the convertible corporate bonds and other derivatives issued by it shall be terminated. This means that if the stock is delisted, the Guanghui convertible bond will also be delisted. 

From the perspective of the secondary market, on June 20, Guanghui Automobile closed below 1 yuan for the first time, at 0.98 yuan, and on June 21, Guanghui Automobile directly opened at the price of 0.88 yuan, and soon closed the limit after a short adjustment. In terms of convertible bonds, on June 20, Guanghui convertible bonds fell 7.66%; On June 21, Guanghui convertible bonds opened low and went low, and then closed 20% to 57.54 yuan / piece. 

The continuous decline in the share price of Guanghui Automobile has also highlighted the risk of equity pledge of its controlling shareholder, Guanghui Group. Previously, on May 25, Guanghui Automobile announced that the company recently received a notice that Guanghui Group pledged its 8 million shares of the company's unrestricted tradable shares to China Development Bank Securities Co., Ltd., the trustee of Xinjiang Guanghui Industrial Investment (Group) Co., Ltd.'s 2021 non-public issuance of exchangeable corporate bonds (Phase I). 

As of the disclosure date of the announcement at that time, Guanghui Group had pledged a total of 1.655 billion shares of the company, accounting for 62.76% of its holdings and 20.41% of the company's total share capital. 

In addition, when the stock price continued to be sluggish, Guanghui Automobile's executives and controlling shareholders played a set of "combination punches" to stabilize the stock price. 

On June 3, some directors, supervisors and senior managers of Guanghui Group and Guanghui Automobile disclosed their plans to increase their shareholdings. Among them, Guanghui Group plans to increase its holdings of the company's shares by 50 million yuan to 100 million yuan, and some directors, supervisors and senior executives plan to increase their holdings by a total of 1.3 million yuan to 2.3 million yuan. 

The above-mentioned increase was launched on the second day of the announcement, and Guanghui Group increased its holdings of 20.65 million shares of the company through centralized bidding within three days, and some directors, supervisors and senior managers increased their holdings of more than 690,000 shares in two days.

In addition, according to the disclosure on June 6, Guanghui Group purchased 173,300 convertible corporate bonds issued by the company, using a total of 15.0079 million yuan, and converted all its purchased convertible bonds into the company's A-share shares through the Shanghai Stock Exchange system, calculated at a conversion price of 1.5 yuan per share, with a total of 11.552 million shares. 

Subsequently, the company further explained on the interactive platform that the company's shareholders purchased more than 1,500 yuan of "Guanghui convertible bonds" and chose to transfer shares under the high conversion premium rate, which increased their holdings of 11.552 million shares of the company in disguise, and this increase was not included in the above-mentioned commitment to increase the plan, which means that the controlling shareholder increased his holdings by an additional 11.552 million shares, indicating that he fully recognizes the value of Guanghui Automobile shares and convertible bonds, as well as his firm confidence in the company's future development. 

Despite this, investors still "voted with their feet", and since the announcement of the shareholding plan, the share price of Guanghui Automobile has fallen instead of rising, and has sounded the delisting alarm step by step. 

The short-term debt burden is heavy

According to the research report of Guosheng Securities, Guanghui Automobile was established in 1999 and was dominated by mainstream mid-to-high-end brands such as Toyota, Honda, and General Motors in the early days. In 2016, the company acquired Baoxin Automobile and Dalian Zunrong, which greatly increased the coverage of luxury and ultra-luxury brands, and at the same time, the company seized the opportunity of aftermarket development and took the lead in the layout of passenger car financial leasing and second-hand car market. 

According to the company's 2023 annual report, Guanghui Automobile is currently the largest luxury passenger car distribution and service group in China, a leading second-hand car distribution and trading agency service entity group, and the largest financial leasing provider among passenger car dealers. 

According to data from the China Automobile Dealers Association, in 2023, Guanghui Automobile will rank first in the industry in terms of total passenger car sales and second in terms of revenue among major dealer groups. 

Although it occupies a leading position in the industry, Guanghui Automobile's performance is not stable. The company pointed out in the annual report that last year, in order to compete for market share, major OEMs launched a price war throughout the year, resulting in a general decline in automobile sales prices, which had a certain impact on the profits of related enterprises in the automobile industry. In particular, car dealers at the end of the automotive industry chain are forced to bear huge operating pressure. 

In 2023, the company will achieve an operating income of 137.998 billion yuan, an increase of 3.34% over the same period of the previous year, and a net profit attributable to shareholders of listed companies of 392 million yuan, turning losses into profits. According to the financial report, the company's gross profit margin of vehicle sales is only 1.65%, which is a large gap compared with the overall gross profit margin of 8.29%; At the same time, Flush iFinD data shows that the company's sales net profit margin was as low as 0.46% during the reporting period.

In the first quarter of 2024, Guanghu Automobile achieved operating income of 27.79 billion yuan, a year-on-year decrease of 11.49%; The net profit was 70.9405 million yuan, a year-on-year decrease of 86.61%. The company said that due to the impact of the industry price war, the profitability of the whole vehicle declined, and the traditional fuel vehicles were squeezed by the new energy vehicle market, and the revenue scale declined but the cost was relatively rigid, resulting in a sharp decline in net profit attributable to shareholders of listed companies. 

As of the end of March 2024, the company's share capital is 8.111 billion yuan, of which Guanghui Group holds 31.14% of the company's shares and is the controlling shareholder of the company, and Sun Guangxin holds 50.06% of the equity of Guanghui Group and is the actual controller of the company. 

The price war in the automotive industry continues, and dealers suffer. In addition, another problem for Guanghui Automobile is financial pressure. As of the end of the first quarter, the company's total liabilities were 69.254 billion yuan, of which short-term borrowings were as high as 30.463 billion yuan, but the monetary funds on the books were only 8.336 billion yuan.

In the same period, the company's total assets were 111.737 billion yuan, and the corresponding asset-liability ratio was 61.98%. However, considering that the goodwill on the company's statement is as high as 18.75 billion yuan, there is a possibility of impairment of future assets. 

Interestingly, on June 19, Dagong International Credit Rating Co., Ltd. released a credit rating report for Guanghui Automobile. 

It pointed out that the company had unstable earnings; Since 2021, the asset scale has continued to decline; The scale of goodwill is large; The scale of restricted assets is large, and the liquidity of assets is average; As of the end of 2023, the proportion of short-term interest-bearing debt is relatively high, and the company's short-term debt burden is heavy. 

Even so, Dagong International still affirms that Guanghui Auto's main credit rating is AA+, with a stable rating outlook for the next 1-2 years. It is expected that in the future, the company will maintain stable development. 

Since May, Caitong Securities and Huachuang Securities have also given investment suggestions of "overweight" and "recommendation" to Guanghui Automobile in the research report. 

The capital bureau of the "richest man in Xinjiang".

According to the official website, Guanghui Group was founded in 1989 and is a local "Fortune 500" enterprise in Xinjiang, and the group has now formed a development pattern of "energy development, automobile services, modern logistics, real estate" four major industrial sectors, with Guanghui Energy, Guanghui Logistics, Guanghui Automobile, Guanghui Baoxin, and Alloy Investment 5 listed companies, with business throughout the country and extending overseas. 

In 2023, Guanghui Group will have total assets of 247.193 billion yuan, operating income of 214.603 billion yuan and net profit of 4.409 billion yuan. 

The 100 billion asset "Guanghui system" was created by Sun Guangxin, the richest man in Xinjiang. According to public information, Sun Guangxin was born in a compound in Urumqi in 1962. After failing the college entrance examination, Sun Guangxin enlisted in the army. 

In 1988, 26-year-old Sun Guangxin was demobilized from the army. With 3,000 yuan of transfer fees and 400,000 borrowed yuan, he moved to the shopping mall, founded Guanghui Industry and Trade, the predecessor of Guanghui Group, and earned his first pot of gold by selling bulldozers. 

Since then, Sun Guangxin has entered the restaurant industry for a time and invested in entertainment entities. Since the 90s of the 20th century, with a keen sense of the market, Sun Guangxin has stepped into the oil industry and real estate. In 1993, the tallest landmark building in Urumqi at that time, "Guanghui Building", was built. 

In 2000, Guanghui Group entered the automobile service and clean energy industry. In May of the same year, Guanghui Industrial Co., Ltd. was listed on the Shanghai Stock Exchange and later renamed Guanghui Energy. 

With the continuous expansion of the industrial territory, Sun Guangxin's wealth increased dramatically. As early as 2002, he ranked third on the 2002 Forbes list of China's richest people with a net worth of 600 million US dollars, and was known as "the richest man in Xinjiang". On the 2024 Hurun Global Rich List, Sun Guangxin ranks 655th with a net worth of 35.5 billion yuan.

However, at present, many of Sun Guangxin's listed companies are facing different challenges. In addition to the delisting crisis of Guanghui Automobile, the share price of Guanghui Baoxin, which is listed on the Hong Kong stock market, has fallen into the ranks of "penny stocks", with the latest stock price of HK$0.172 per share and a total market value of HK$488 million. 

As of the close of trading on June 21, Guanghui Logistics closed at 4.93 yuan, a new low this year, with a cumulative decline of 36.63%. 

Guanghui Energy, with a market value of 49.2 billion, can be regarded as the flagship listed company of the "Guangxin system". According to the financial report, the company achieved operating income of 61.475 billion yuan last year, a year-on-year increase of 3.48%; The net profit attributable to the parent company was 5.173 billion yuan, a year-on-year decrease of 54.37%. In the first quarter of 2024, the company achieved a total operating income of 10.041 billion yuan, a year-on-year decrease of 49.44%; The net profit attributable to the parent company was 807 million yuan, a year-on-year decrease of 73.15%. 

In this regard, the Minsheng Securities Research Report pointed out that the year-on-year decline in the volume and price of major products dragged down the company's performance, and considering the decline in performance, the company was downgraded to a "cautious recommendation" rating.

For the follow-up development of Guanghui system, Radar Finance will continue to pay attention. 

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