Interface News Reporter | Yin Jingfei
Under the risk of delisting at face value, the future of ST Mingcheng (600136.SH), which returned from bankruptcy and reorganization, seems to be uncertain, and the gold rush journey of reorganization investors is full of risks.
On July 1, ST Mingcheng's share price fell 4.64% to 1.44 yuan per share, after the listed company had just "picked up the star" on June 24. The stock was suspended on June 25, resumed trading on June 26, and continued to fall for three consecutive trading days, falling 3.75% on June 27, falling 1.95% the next day, and plunging 5.3% again on July 1, with a current market value of nearly 3 billion yuan.
A secretary of the board of directors of a listed company told Jiemian News: "The 1 yuan delisting rule may trigger a stampede in the market, and the sharp drop in ST Mingcheng's stock price may also be affected by this factor." ”
The road ahead is uncertain
ST Mingcheng was founded in 1992 and listed on the Shanghai Stock Exchange in 1998. After three asset restructurings and several changes of actual controllers, the company acquired Qiangshi Media in February 2015, and in May 2015, Contemporary Group became the actual controller of the listed company through an indirect capital increase of 300 million yuan. In 2016, the company entered the sports industry and began to walk on two legs of "film and television + sports", and at first the strategy was effective, and the company was able to achieve profitability from 2015 to 2017. However, since then, due to the impact of the film and television industry cycle and the impact of the epidemic, the company has been losing money since 2019. After the epidemic, its cash flow shortage led to loan contract disputes, and ST Mingcheng fell into the quagmire of litigation and arbitration.
On January 3, 2023, ST Mingcheng's pre-reorganization procedure was initiated; On October 13 of that year, after an open recruitment and selection process, four companies including Hubei Liantou City Operation Co., Ltd. became investors in the company's reorganization; On November 10, the Intermediate People's Court of Wuhan Municipality, Hubei Province, ruled to approve the termination of the company's reorganization procedure and entered the implementation stage of the reorganization plan. At the end of 2023, *ST Mingcheng will implement the reorganization plan, and the controlling shareholder will be officially changed to the holding company of Hubei Liantou, and the actual controller will be changed to Hubei State-owned Assets Supervision and Administration Commission.
In 2023, through the bankruptcy reorganization procedure, the company's overdue debts were resolved, the asset-liability ratio decreased from 239.31% at the beginning of the year to 32.38%, and the company's net assets increased significantly, with net assets attributable to shareholders of the parent company at the end of 2023 being 374 million yuan. According to the company, the company's capital structure has improved significantly, and various debt-servicing financial indicators have also improved. At the same time, it has also got rid of the burden of large interest expenses and liquidated damages, and the company's liquidity has been significantly improved.
However, after the bankruptcy reorganization, ST Mingcheng's old injuries have not healed.
At the beginning of this year, the annual review body resigned after only one month in office. On January 26, *ST Mingcheng announced that Baker Tilly International Accounting Firm may not be able to complete the audit of its 2023 financial statements on time due to heavy workload. On March 9, the two directors of ST Mingcheng resigned at the same time.
In 2024, the company's performance will still be in the red. The company's net profit attributable to the parent company in the first quarter of 2024 will be -743,900 yuan, and the net profit attributable to the parent company after deducting non-profits will be -1,106,800 yuan.
Although it has just "picked up the star", the company still has the possibility of falling into the delisting risk warning zone again.
On June 24, ST Mingcheng said that the company's net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses since 2019 has continued to be negative, and the operating income in the first quarter of 2024 will be 10.8529 million yuan, a year-on-year decrease of 91.50%. According to the rules, the company has the risk of operating income of less than 300 million yuan and negative net profit in the 2024 annual report, which will hit the delisting risk warning.
Turning gold into sand?
On October 13, 2023, ST Mingcheng introduced 1 industrial investor and 3 financial investors to become investors in the company's restructuring. It's just that the future of this gold rush is uncertain.
The industrial investor is the local state-owned Hubei Liantou City Operation Co., Ltd. (Hubei Liantou). There are three financial investors, namely local AMC Guohou Asset Management Co., Ltd. (hereinafter referred to as Guohou Asset) and Shenzhen China Merchants Ping An Asset Management Co., Ltd. (China Merchants Ping An Asset), and private equity investment institution Beijing Jiuyin Investment Holding Co., Ltd. (hereinafter referred to as Jiuyin Holdings, 833998.N).
- The controlling shareholder behind Hubei United Investment Group Co., Ltd. (hereinafter referred to as Hubei United Investment Group) was established in September 2008 and the actual controller is Hubei State-owned Assets Supervision and Administration Commission. According to its official website, as a large provincial state-owned holding company, Liantou Group is mainly funded by the State-owned Assets Supervision and Administration Commission of Hubei Province and nine cities in Wuhan City Circle, and six central enterprises in the province (Wuhan Iron and Steel Group, Dongfeng Motor, Gezhouba Group, Three Gorges Group, Hubei China Tobacco, and Hubei Tobacco) are shareholders. The registered capital of the company is 6.56 billion yuan. Its businesses involve new industrial cities, park operations, real estate development, industrial finance, digital industry, infrastructure and new infrastructure, with total assets of 320 billion yuan.
- Jiuyin Holdings (833998. According to the official website of NQ, the institution is a full-industry chain asset management group that carries out private securities investment, equity investment, venture capital, and other types of business. At present, the scale of funds under management exceeds 20.1 billion yuan, and it is one of the few asset management companies in China that has been listed on the national stock transfer system. As of the end of 2023, the total assets of the private equity institution reached 299 million yuan, and the net profit loss attributable to the parent company was 32 million yuan.
- In recent years, participating in the bankruptcy and reorganization of distressed enterprises and even listed companies has been a business opportunity that AMC is more interested in, and Guohou Asset Management and China Merchants Ping An Asset Management are the more active places in this field. China Merchants Ping An Asset Management is also characterized by the acquisition and restructuring of distressed assets.
As one of the 80 listed companies in Wuhan, local state-owned assets play an important role in the bankruptcy reorganization of ST Mingcheng. As an industrial investor, Hubei United Investment is the core restructuring investor.
At that time, the four reorganization investors planned to obtain 612 million shares of the company for 601 million yuan, with a share price of 0.98 yuan per share.
According to the reorganization plan, Hubei Liantou subscribed for 408 million shares, accounting for 20% of the total share capital, and became the actual controller. That is, Hubei United Investment has taken out nearly 400 million yuan, Guohou Assets has invested about 47 million yuan, Zhaoping Assets has invested about 94 million yuan, and Jiuyin Holdings has invested nearly 59 million yuan.
Compared with the reorganization plan, as of the end of the first quarter of 2024, the shares held by Hubei Liantou, Zhaoping Assets, and Jiuyin Holdings have not changed. As of the close of trading on July 1, ST Mingcheng closed at 1.44 yuan per share. On the surface, according to the input cost of 0.98 yuan per share at that time, the book floating profit of its three reorganization investors was nearly 47%.
However, once the company's closing price falls below the red line of $1 for 20 consecutive trading days, ST Mingcheng will be forced to delist according to the relevant rules. This means that the hundreds of millions of yuan invested by the reorganization investors may be wasted.
In addition, some creditor investors also suffered heavy losses. According to the reorganization plan, for ordinary creditor's rights, the full repayment of less than 1 million yuan at that time: more than 1 million yuan of shares for debts, for every 100 yuan of creditor's rights, "8.68 shares of shares + about 5.81 shares of trust beneficiary rights", 10.84 yuan per share to offset debts, a total of 846 million shares.
The listed company will offset the shares to the creditors at a price of 10.84 yuan per share to repay part of the debt. However, the current stock price is only 1.44 yuan per share, and the company is still facing the risk of delisting. Once ST Mingcheng is delisted, creditors will also suffer heavy losses.
As of the first quarter of 2024, the company has monetary funds of 178 million yuan on its books, and its net operating cash flow is only about 9 million yuan. As a newly owned Hubei state-owned asset, will it repurchase the company's shares?