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Source: Beijing Business Daily
Planning for nearly a year, Huarong Holdings (600421) cross-border mergers and acquisitions or "yellow". On May 11, Huarong Holdings disclosed that the company decided to terminate the major asset restructuring, that is, to terminate the acquisition of 100% equity in Nanjing Development Optoelectronics Technology Co., Ltd. (hereinafter referred to as "Development Optoelectronics") and to raise supporting funds, which also made the company's share price test on May 13. It should be pointed out that this is not the first cross-border merger and acquisition of Huarong Holdings. In the past three years, the company has also wanted to cross-border medical field twice, but to no avail. Behind the frequent pursuit of cross-border, Huarong Holdings' operating performance is poor, and its net profit is negative after deducting it for many years in a row.
Termination of acquisition and development of optoelectronics
Huarong Holdings said that in view of the development of major optoelectronic products affected by the overall market environment, the recovery of terminal market demand was lower than expected, which had a great impact on the smooth progress of the transaction evaluation work, the company decided to terminate the acquisition of 100% stake in Optoelectronics.
It is understood that Huarong Holdings plans to purchase and develop optoelectronics for a long time. On June 3, 2023, Huarong Holdings disclosed that the company was planning to acquire and develop a 100% stake in Optoelectronics by issuing shares and paying cash. The company was established in August 2016 with a registered capital of 1172.Earncryptowithgames850,000 yuan, mainly engaged in the development, production and technical services of special optical fiber devices, sensing components and systems, such as optical fiber sensitive ring components, energy optical fiber devices, optical fiber sensors, and so on.
While Huarong Holdings is located in the prefabricated construction industry, Zhejiang Zhuangchen, a subsidiary of Huarong Holdings, mainly produces prefabricated component (PC) moulds, mold tables, tooling shelves and truss bars. It is not difficult to see from the business that the acquisition of Huarong Holdings also constitutes a cross-border.
However, after nearly a year of planning, the merger and acquisition of Huarong Holdings was finally declared a failure. In response to related issues, a reporter from Beijing Business Daily called Huarong Holdings for an interview, but the phone was not answered.
In fact, this is not the first time Huarong Holdings has sought to cross the border. In the past two years, the company has planned the cross-boundary medical area twice in 2021, but failed. In July 2021, Huarong Holdings planned to reorganize the project and proposed to buy 80% of the shares in Wuxi Shenrui Biological products Co., Ltd., with a total transaction amount of no more than 270 million yuan.
However, after months of planning, Huarong Holdings said that due to the large differences between the company and the other party on the valuation of the restructuring, the core terms could not be agreed and decided to terminate the restructuring.
After that, Huarong Holdings quickly found the next restructuring target, revealing in 2021 that it planned to buy a 100% stake in Shanghai Core Super Biotechnology Co., Ltd. (hereinafter referred to as "Core Super Biology"), but eventually failed to avoid the fate of termination.
Cross-border has been questioned twice by supervision.
It should be pointed out that Huarong Holdings's proposed purchase of optoelectronic development has been questioned twice by the supervision.
Data show that in 2021, the development of optoelectronics did not achieve operating income. The operating income from January to May in 2022 and 2023 was 3.4649 million yuan and 13.7874 million yuan respectively, the net cash flow generated by operating activities was-5.5788 million yuan and-6.3392 million yuan respectively, and the net cash flow generated by investment activities was-13.2483 million yuan and-1.871 million yuan respectively. The net profit from January to May from 2021 to 2023 is-54000 yuan,-6.2565 million yuan and-10.1619 million yuan respectively. According to the first quarterly report of 2023, the net worth of Huarong Holdings is only 19.2963 million yuan.
In this regard, the Shanghai Stock Exchange has asked Huarong Holdings to explain whether the operation and financial situation of Development Optoelectronics since its establishment is in a normal state of operation.EarncryptowithgamesFrom January to May from 2021 to 2023, the specific reasons for the low business income and sustained loss of performance, and the uncertainty of profitability; combined with the operation and investment of Development Optoelectronics, analyze and explain the specific reasons why the relevant cash flow continues to be negative.
In addition, Huarong Holdings also signed a loan Agreement with Development Optoelectronics on June 16, 2023, intending to provide no more than 30 million yuan of liquidity support to Development Optoelectronics for its daily operation needs. The Shanghai Stock Exchange has also asked Huarong Holdings to disclose the reasons and considerations for providing financial assistance to Optoelectronics Development before the restructuring plan is actually advanced.
According to the announcement of termination and reorganization disclosed by Huarong Holdings on May 11, so far, the company has provided a cumulative loan of 15 million yuan to Development Optoelectronics, and the last loan is due on August 31, 2024. At present, Development Optoelectronics still owes the company 15 million yuan in loan principal. After negotiation with Development Optoelectronics, Development Optoelectronics agreed to repay the principal and interest on schedule in accordance with the loan agreement with the company.
Xu Xiaoheng, an expert in investment and financing, told the Beijing Business Daily that compared with industrial mergers and acquisitions, cross-border mergers and acquisitions are more difficult, and mergers and acquisitions are not familiar with assets in the field, and the value judgment is not necessarily particularly accurate. "Cross-border mergers and acquisitions usually have a lot of uncertain risks, listed companies enter industries with low correlation, management, talent, technology, knowledge and so on will become the shortcomings of enterprise development, and there will be more problems in actual operation than expected." Xu Xiaoheng said so.
Three consecutive years of net profit and loss
Behind the frequent pursuit of cross-border mergers and acquisitions, Huarong Holdings has been miserable in recent years.
It is understood that Huarong Holdings landed in the A-share market in 2004, the company formerly known as Yangfan Holdings, renamed at the end of 2020. From the point of view of the company's performance, the net profit after deduction has been negative since 2016, and the net profit from 2016 to 2023 is about-2.496 million yuan,-7.248 million yuan,-8.653 million yuan,-7.073 million yuan,-4.299 million yuan,-9.034 million yuan,-7.345 million yuan and-85.52 million yuan, respectively.
In addition, in terms of attributable net profit, Huarong Holdings has also lost three times in a row. From 2021 to 2023, the net profit attributable to Huarong Holdings was about-8.864 million yuan,-6.487 million yuan and-8.28 million yuan respectively.
On April 24 this year, Huarong Holdings also disclosed its quarterly report for 2024. During the reporting period, the company's net profit was still at a loss, with realized operating income of about 21.9756 million yuan and corresponding vested net profit of about-582700 yuan. the corresponding net profit after deducting non-profit is about-801200 yuan, which is lower than that of the same period last year.
Bunaxin, vice president of the Science and Technology Industry Investment Branch of the China International Association for the Promotion of Science and Technology and executive director of the strategic investment think tank, told the Beijing Business Daily that the continuous loss of net profit attributable to non-profit after deducting non-profit indicates that the company's main business is weak. Under such circumstances, listed companies directly Purchasing high-quality assets is the fastest way to improve company performance, but the risks are also greater.
In the secondary market, as of the close of May 10, Huarong Holdings 'share price was reported at 6.92 yuan/share, with a total market value of 1.354 billion yuan.
Beijing Business Daily reporter Ma Huancheng