On September 3, Shengneng Group fell more than 98% in early trading, with a turnover of HK$260 million, and its market value was less than HK$400 million, falling by more than 99% in intraday trading. The company was previously named by the Hong Kong Securities and Futures Commission as highly concentrated in equity.
Based on the company's closing price of 20.25 yuan yesterday, the market value of more than 20 billion yuan disappeared in only half a day.
Shengneng Group previously announced that the Hong Kong Securities and Futures Commission had recently conducted an inquiry into the company's equity distribution. The results of the enquiry revealed that on 19 August 2024, 25 shareholders held a total of 279 million shares of the Company, representing 27.65% of the issued share capital of the Company. The results of the enquiry also revealed that on 19 August 2024, a total of 49,309,500 shares of the Company (representing 4.88% of the issued share capital) were not deposited with the Central Clearing and Settlement System ("CCASS") and were not registered in the Company's register of members in Hong Kong. Together with 582.5 million shares (representing 57.67% of the issued share capital) held by a controlling shareholder of the Company, the relevant equity interests represent 90.20% of the issued share capital of the Company. As a result, only 98,941,600 shares of the company (9.80% of the issued share capital) are held by other shareholders.
The SFC reminds shareholders and prospective investors to exercise caution when trading the company's shares in view of the high concentration of shareholding in a small number of shareholders, and the price of the company's shares may fluctuate significantly even if a small number of shares are traded.
Up more than 400% in 4 months //
Judging from the company's stock price trend, since May this year, the company's share price has risen from less than 4 yuan to more than 20 yuan at the end of August, an increase of more than 400% in just four months.
According to the data, the company is a global manufacturer of ultra-high power graphite electrodes, with a customer base in more than 25 countries around the world, including the Americas, EMEA, APAC and China, the world's largest electric arc furnace steel manufacturers, and its products are sold in the automotive, infrastructure, construction, electrical, machinery, equipment and transportation industries. In order to better serve and support customers, the company has sales offices in the Americas, EMEA, APAC and China. According to the Frost & Sullivan Report, the Company ranked ninth among the world's ultra-high power graphite electrode manufacturers with a market share of approximately 1.5% in 2019 and ranked fourth in China's high-quality ultra-high power graphite electrode manufacturing market in 2019 with a market share of approximately 13.3% (in terms of production volume).
On August 30, Shengneng Group released its results for the six months ended June 30, 2024, with an income of US$32.101 million, a year-on-year decrease of 26.5%; the net loss was 14.368 million US dollars, an increase of 240.2% year-on-year; Basic loss per share was US1.4 cents. Compared with the company's performance in 2023, the performance loss has a tendency to expand.
According to the announcement, the year-on-year decrease in revenue during the period was mainly due to the decrease in the average selling price of graphite electrodes from about US$4,549 per metric ton in the first half of 2023 to about US$3,316 per metric ton in the first half of 2024. Despite the current global economic uncertainty in the first half of 2024, the Group managed to maintain a slight increase in graphite electrode sales at 9,682 metric tonnes in the first half of 2024, compared to 9,603 metric tonnes in the first half of 2023.
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