#长文创作激励计划#
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On June 20, Zhengyuan Co., Ltd. (600321), the first non-ST delisted stock, was officially born.
According to Zhengyuan's announcement: from April 30 to May 30, the closing price of each share of Zhengyuan shares for 20 consecutive trading days was lower than 1 yuan, touching the relevant regulations of the Shanghai Stock Exchange for delisting at face value (that is, the stock price was lower than 1 yuan per share for 20 consecutive trading days), and Zhengyuan shares will be terminated and delisted on June 27.
As soon as the news came out, the rest of the non-ST stocks hovering on the edge of the "1 yuan red line" also sounded the alarm. Among them, Huawen Group (000793), a Hainan cultural tourism company, has launched a self-rescue.
Source: Oriental Fortune official website Huawen Group (as of June 22, 2024)
In terms of stock price, as of June 6, Huawen Group's share price has been below 1 yuan per share for 7 consecutive trading days. Since then, Hainan state-owned assets have raised their cards to save the market, and the stock price has risen for 5 consecutive days. Since then, Huawen's share price has barely stabilized at more than 1 yuan per share (as of June 21, the closing price was 1.3 yuan per share). However, the main business has shrunk, the investment has suffered huge losses, and Huawen has fallen into the quagmire of losses. If we can't improve our business, even if we have state-owned assets, we may only be able to solve the temporary difficulties.
First, the main business has shrunk seriously
According to the data, Huawen Group was established in 1991, and its predecessor was Hainan Petrochemical Gas Co., Ltd., which is mainly engaged in gas business. In 1997, Huawen landed in the capital market.
At present, Huawen's business type can be summed up in one word - miscellaneous.
According to the data in 2023, Huawen's operating income involves 9 businesses, including information communication services, bulk trade, complex management services, video information services, and leisure tourism. In summary, it mainly involves two transformations and upgrading.
From the perspective of financial data: before 2006, Huawen's business was mainly for the professional operation of liquefied petroleum gas. In 2006, Huawen acquired "Times Media" and "Huashang Media" under the Securities Times, officially transformed the media industry, and changed its name to "Huawen Media".
From 2013 to 2014, Huawen successively acquired cultural media companies such as Guoguang Guangrong (which has obtained the exclusive right to consult, plan, design, produce and act as an agent for the commercial advertising of all radio frequencies of China Radio International in China), Guoshi Shanghai and Zhangshi Yitong (an advertising agency focusing on traffic marketing), and other cultural media companies, which have taken the media industry to a new level. Since then, media services have become Huawen's largest source of income. In 2023, Huawen's total revenue will be about 567 million yuan, of which media services will generate about 238 million yuan, accounting for more than 40%.
Source: Straight Flush iFinD - Operating Income
However, in recent years, on the one hand, the overall economic environment is very sluggish, and most companies are tightening their belts to survive, and their advertising budgets have been greatly reduced. On the other hand, in the face of the mushrooming development of various new media, the traditional media company market has been carved up.
Judging from the data, since 2018, Huawen Media's business revenue has begun to decline. In 2021, there will be only 250 million yuan left in revenue, which is only a fraction of the 1.24 billion revenue in 2020.
Source: Straight Flush iFinD - Media Business Revenue
The main business has shrunk seriously, and Huawen's overall performance must be ugly. In 2021, Huawen's overall revenue will only be 826 million yuan, a decrease of about 2 billion yuan from 2.97 billion yuan in 2020. In the first quarter of 2024, Huawen's total revenue will be about 88 million yuan, a year-on-year decrease of about 40 million, and the shrinkage will continue.
Second, diversified operation, poor results
In the face of the shrinkage of the main business, Huawen struggled to pursue transformation, hoping to seek new profit growth points to replace the important position of traditional media in the company, but the results were really poor.
In 2019, whether from the top-level design or objective practice, the integration of culture and tourism has become a hot direction. To give a simple example, after Dong Yuhui became popular, cultural tourism everywhere was shouting Dong Yuhui, in addition to traffic, this is a typical combination of culture and tourism. Of course, Huawen is also actively involved in it.
On November 13, 2019, Huawen announced the completion of the acquisition of 62% of the shares of Sanya Huitu. As a local tourism company in Sanya, Sanya Huitu is mainly engaged in the development, construction and operation of tourist attractions.
In addition, the abbreviation of the company's securities has also been changed from "Huawen Media" to "Huawen Group", which shows the determination to transform.
Source: Company announcement (13 November 2019)
In order to transform, Huawen not only made equity acquisitions, but also invested heavily in real estate.
Market information shows that in 2018, Huawen and Tibet Ivy Venture Capital Co., Ltd. initiated the establishment of Hainan Cultural and Creative Tourism Industrial Park Co., Ltd. (hereinafter referred to as Hainan Cultural Tourism), with Huawen holding 55% of the shares. Hainan Cultural Tourism purchased the Shuangchuang Building in Haikou City, Hainan Province, which is used for office work on the one hand, and for foreign investment and leasing on the other. In 2019, Huawen's investment real estate jumped from 39 million yuan to 2.150 billion yuan.
The determination was great, but the results were not good. Let's talk about Sanya Huitu first.
Dong Yuhui's example allows us to see the essence of the integration of culture and tourism, first of all, culture must come first, and use the flow of culture to drive the tourism economy. Obviously, Sanya culture is not popular, and Huawen's tourism business income has been tepid.
Source: Straight Flush iFinD
Tourism has not developed, and the value of real estate invested heavily will naturally depreciate. In 2023, the depreciation amount will be as high as 326 million yuan.
In addition to cultural tourism, Huawen also high-priced cross-border intelligent car networking and other industries, but they all ended in huge losses. So far in 2022, Huawen has lost money for two consecutive years. In the first quarter of 2024, Huawen will continue to lose 35 million.
Third, the government intervened, only for a while
In the face of sluggish performance, Huawen's stock price is even more sluggish.
On May 29, Huawen's closing price was 0.98 yuan per share, and the stock price was lower than 1 yuan for the first time. On the same day, Huawen disclosed the risk warning announcement that the company's shares may be terminated from listing.
Source: Company announcement (29 May 2024)
As a listed company born and raised in Hainan, Huawen has always been known as "the first stock of Hainan Culture Media". Naturally, the government cannot sit idly by.
According to Huawen's announcement: From June 4th to June 6th, Hainan Lianhan (behind the Hainan State-owned Assets Supervision and Administration Commission) purchased a total of 5.0004% of Huawen's shares through centralized bidding. The government reluctantly pulled Huawen back from the brink of withdrawal for the time being.
Source: Company announcement (7 June 2024)
Although there is no danger for the time being, from the perspective of business, it may be difficult for Huawen to turn losses into profits in the short term. Although the government can save it for a while, it may not be able to save him for a lifetime.
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.