Hesheng Silicon, an industry leader whose stock price soared by nearly 640% during the year, has continuously thrown out two valuable expansion plans.
On the evening of September 8, Hesheng Silicon announced that it intends to spend 7.6 billion yuan to build industrial silicon and siloxane projects.
As of the close of trading on September 9, Hesheng Silicon industry quoted 211 yuan / share, down 0.7%, with a total market value of 226.649 billion yuan.
The total investment of the two projects is 7.6 billion yuan
Specifically, Hesheng Silicon intends to invest in the construction of the "Xinjiang Eastern Hesheng Silicon Industry Co., Ltd. Coal-Electricity-Silicon Integration Project Phase II Industrial Silicon Project with an Annual Output of 400,000 Tons" through its wholly-owned subsidiary, Eastern Hesheng Silicon Industry Co., Ltd., with an estimated total investment of 4.084 billion yuan.
According to the announcement, the main construction content of the project includes the construction of 32 new 33MVA electric furnaces, supporting desulfurization and denitrification devices, environmental protection facilities and supporting substation and distribution devices and other ancillary facilities.
At the same time, Hesheng Silicon also plans to invest in the construction of the "Xinjiang Hesheng Silicon New Materials Co., Ltd. Coal- Electricity-Silicon Integration Project Phase III of 200,000 Tons of Siloxane and Downstream Deep Processing Project" through its wholly-owned subsidiary Xinjiang Hesheng, with a total investment estimated at 3.532 billion yuan.
The sites of the above two projects are located in the Stone Industrial Park in Shanshan County, Xinjiang, and the construction period is the same as two years.
Hesheng Silicon said that the construction of industrial silicon projects will make full use of the company's integration and synergy advantages in the Xinjiang industrial park, and further exert the company's technical advantages and overall scale advantages; the site selection plan of the siloxane project mainly considers the supporting resources nearby, making full use of the supporting facilities of upstream and downstream devices, facilitating management, reducing investment and human resources, reducing product costs, and improving product competitiveness.
According to public information, Hesheng Silicon was established in 2005 and listed on the Shanghai Stock Exchange in October 2017. The company is mainly engaged in industrial silicon and silicone and other silicon-based new material products research and development, production and sales, its industrial silicon business is mainly concentrated in Xinjiang, the main production base of silicone is located in Zhejiang, Sichuan and Xinjiang.
It is worth mentioning that on June 23, local time, the US Department of Commerce listed a trade "blacklist", and Hesheng Silicon (Shanshan) Co., Ltd., a subsidiary of Hesheng Silicon, was prominently listed. In addition, on June 24, local time, the US Customs and Border Protection bureau issued a temporary release order for the silicon-based products produced by Hesheng Silicon and its subsidiaries.
Hesheng Silicon said in its semi-annual report that the order will not have a greater impact on the company's business and performance. At present, the company is communicating with the relevant departments in the United States to apply for removal from the entity list and a temporary release order.
Share price increased by more than 639% during the year
Since the beginning of this year, silicon prices have been fierce, and after a brief correction in July, they re-entered the rising range in August, and the price has risen for five consecutive weeks. As of September 8, the market price of silicon metal was 32750 yuan / ton, up 150% year-on-year, and the price of silicone was 37500 / ton, up 121% year-on-year. The reference price of industrial silicon market has risen to 27405 yuan / ton, an increase of 145.9% year-on-year.
Benefiting from the high prosperity of the silicon industry, the stock price of Hesheng Silicon, as the industry leader, has also soared this year. From the closing price of 32.85 yuan / share on January 4, it hit a record high of 243 yuan / share on September 3, an increase of more than 639%.
According to the interim report, Hesheng Silicon Achieved Revenue of 7.702 Billion Yuan in the first half of 2021, an increase of 84.11% year-on-year; net profit attributable to the mother and non-net profit of 2.372 billion yuan and 2.366 billion yuan respectively, an increase of 428.26% and 466.57% year-on-year.
In view of the performance improvement, Hesheng Silicon industry said that since 2021, the company's industrial silicon capacity utilization rate has been effectively improved, and the output has increased significantly year-on-year; at the same time, affected by factors such as changes in the industry and market supply and demand, the sales volume and market sales price of the company's main products have increased significantly compared with the same period last year.
In the long run, the performance of Hesheng Silicon Industry is not solid. In 2018, the first full fiscal year after the company's listing, it set a new high in performance, achieving revenue of 11.076 billion yuan and net profit attributable to the mother of 2.805 billion yuan. By 2019, the company's profits fell twice, 8.939 billion yuan and 1.106 billion yuan respectively, down 19.3% and 60.56% year-on-year. In 2020, its revenue increased slightly by 0.33% over the previous year to 8.968 billion yuan, and its net profit attributable to the mother was 1.404 billion yuan, an increase of 26.93% year-on-year.
Source: Wind
In addition, in the above three years, Hesheng Silicon's operating cash flow only achieved positive growth in 2019, up 9.74% year-on-year; in 2018 and 2020, it decreased by 35.34% and 8.37% respectively year-on-year.
The reporter also noted that the gross profit margin of Hesheng Silicon Industry also showed a downward trend. According to the annual report data, from 2018 to 2020, the gross profit margin of the company's silicones was 49.87%, 33.40%, and 30/15%, respectively; the gross profit margins of industrial silicon were 33.01%, 23.71%, and 25.86%, respectively.
On the other hand, the debt pressure of Hesheng Silicon Industry should not be underestimated. In 2019, the company's monetary funds were 300 million yuan, short-term borrowings were 2.785 billion yuan, long-term borrowings were 496 million yuan, bonds payable were 607 million yuan, non-current liabilities due within one year were 190 million yuan, and interest-bearing liabilities totaled 4.078 billion yuan.
In 2020, The company's monetary funds are 349 million yuan, short-term borrowings are 2.481 billion yuan, long-term borrowings are 2.14 billion yuan, bonds payable are 33.0969 million yuan, non-current liabilities due within one year are 108 million yuan, and interest-bearing liabilities total 4.762 billion yuan; in the first half of 2021, the company's monetary funds are 2.288 billion yuan, short-term borrowings are 2.39 billion yuan, long-term borrowings are 1.598 billion yuan, bonds payable are 34.2255 million yuan, non-current liabilities due within one year are 230 million yuan, and interest-bearing liabilities total 4.252 billion yuan.
The second shareholder had touched the red line for cash-out
From the equity relationship chart of Tianyancha, it can be seen that Hesheng Silicon is a typical family business, and the Roche family holds a total of 76.43% of the shares.
On July 30, Hesheng Silicon announced that its fourth largest shareholder, Fidelity Industrial, plans to reduce its stake by no more than 64,449,934 shares. According to the closing price of 104.66 yuan per share on July 30, Fidelity Industrial can cash out 6.745 billion yuan. Fidelity Industrial reduced its holdings by 6.5 million shares between March and May this year, with a price range of 42.8 yuan per share to 61.34 yuan per share, and the cash amount was 278 million yuan to 399 million yuan.
The reporter retrieved past announcements and found that on November 19, 2018, less than a month after the ban on the restricted shares of Hesheng Silicon Industry was lifted, the company announced that Fidelity Industry, which was the second largest shareholder at the time, intended to reduce its holdings by 600,000 shares (accounting for 0.0896% of the total share capital) through centralized bidding transactions, and intended to reduce its holdings by no more than 81.8609 million shares (accounting for 12.2180% of the total share capital) through the agreement. The total amount of cash out of Fidelity Industrial is about 3.314 billion yuan, and Huang Wenda's floating profit is more than 25 times.
The agreement to transfer the restricted shares was taken over by the Roche family. On May 8, 2019, the company announced that the shares transferred by Fidelity Industrial to Luo Yi and Luo Yedong had completed the transfer registration.
The reporter also learned that in order to reduce holdings, Fidelity Industry even touched the red line. According to the announcement on December 26, 2019, Fidelity Industrial received a regulatory letter issued by the Zhejiang Securities Regulatory Bureau, and on October 31 and November 1, 2019, it reduced its holdings by 431,800 shares through a centralized auction and cashed out 12.1457 million yuan. As a shareholder holding more than 5% of the shares, Fidelity Industrial failed to fulfill its pre-disclosure obligations in accordance with regulations.
On the other hand, the Roche family is increasing its holdings along the way. According to the announcement on June 21, Hesheng Silicon's 136 million shares in 2020 have been registered and listed on June 18 this year, and are subscribed by Luo Yi and Luo Yedong. After the completion of the offering, the actual controller of the company was changed from Luo Liguo to Luo Liguo, Luo Yi and Luo Yedong. Luo Yi was the daughter of Luo Liguo, and Luo Yedong was the son of Luo Liguo.
It is worth mentioning that the subscription price at that time was 18.65 yuan / share, if calculated according to today's closing price, the floating profit of Roche siblings has exceeded 25 billion yuan.
In addition to taking over the shares of Fidelity Industrial. Luo Liguo and Luo Yi also transferred 2.79% of the company's shares held by shareholder Linyi Zhiqing in September 2020.
It is worth noting that on August 19, Hesheng Silicon Industry announced that as of the disclosure date, Hesheng Group and its co-actors Luo Liguo, Luo Yi and Luo Yedong had pledged a total of 341 million shares of the company's shares, accounting for 41.55% of the total number of shares held by the company and 31.76% of the company's total share capital.
Trainee reporter Juan Yong
Edited by Wang Liying
Editor-in-Charge Sun Xiao