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Transfer Gree Electric Appliances shares to buy Changyuan Group Gree Group this move is dangerous?

Translation 08:33:13AM Jun 04, 2019 Source:Securities Daily

SMM News: Gree Group, which wants to transfer most of its equity in Gree Electric, has extended its hand to another listed company, Changyuan Group, and has been lurking for some time, but Changyuan Group has experienced frequent incidents.

Recently, Changyuan Group issued a "shareholder unanimous Action Agreement expires" announcement, the largest shareholder Tibetan Gold No. 1 and its 22 unanimous actors announced the expiration of the unanimous actor relationship. After the above-mentioned concerted action person dissolved the relationship of concerted action, the largest shareholder of Changyuan Group became Shandong Kexing Pharmaceutical Co., Ltd., which held about 103.43 million shares, accounting for 7.81% of the total share capital of the company. According to the list of the top 10 shareholders, the affiliated companies of Gree Group are also among them, and their holdings are close to the licensing line.

Gree Group wants to join Changyuan Group?

Changyuan Group shareholders in and out, so that the outside world is full of imagination.

According to the list of the top 10 shareholders of Changyuan Group on May 24, 2019, Zhuhai Gree Financial Investment Management Co., Ltd. (hereinafter referred to as "Zhuhai Gree Financial Investment Management Co., Ltd."), a wholly owned subsidiary of Gree Group, Gree Golden Investment) and Zhuhai Free Trade Zone Jin Nuoxin Trading Co., Ltd. (hereinafter referred to as Jin Nuoxin) are among the top 10 shareholders of Changyuan Group. Among them, the proportion of Glijin shares is 3.56%, the proportion of Jinnoxin shares is 1.40%. Gree investment and Jinnoxin are both owned by Gree Group, the two holding proportion has reached 4.96%, close to the licensing line.

Looking through the Changyuan Group's financial reports, it can be seen that Jinnoxin appeared in the top 10 shareholders of Changyuan Group as early as the first quarterly report this year, while Glijin Investment has not yet appeared. In other words, Gree Group in the last two months, and further increased its holdings of Changyuan Group.

At the same time, Gree Group is also planning the transfer of part of the equity in Gree Electric Appliances. Some analysts believe that Gree Group plans to transfer the control of Gree Electric, in order to obtain funds, and then increase the investment in Changyuan Group.

However, Changyuan Group appears to be quite calm. Its announcement on May 31 said that after the company's self-examination, the company's daily business activities are normal, the market environment, industry policy has not undergone major adjustments. In addition, the company has not planned mergers and acquisitions, share issuance, debt restructuring, business restructuring, divestiture and asset injection and other major issues.

At the same time of increasing the holdings of Gree Group, the major shareholders of Changyuan Group are also willing to withdraw. Recently, Changyuan Group issued a "shareholder unanimous Action Agreement expires" announcement, the company's largest shareholder Tibetan Gold No. 1 and its 22 unanimous actors announced the expiration of the unanimous actor relationship. After the dissolution of the relationship of concerted action, the largest shareholder of Changyuan Group became Shandong Kexing Pharmaceutical Co., Ltd., holding 7.81% of the shares in the company.

At the same time as the original major shareholders remove the relationship of concerted action, Gree Group has quietly approached the card line, a series of actions that make the outside world ponder: does Gree Group intend to win Changyuan Group to become its largest shareholder?

In fact, as early as May last year, Gree Group tried to buy Changyuan Group, at that time, Gree Group gave the reason is optimistic about the future of the company. In the end, the acquisition was terminated because Zhuhai state-owned assets did not agree with the acquisition proposal submitted by Gree Group.

Gree Group is still showing strong interest in Changyuan Group. In terms of share price, Gree Group announced at that time that it intended to buy 20 per cent of Changyuan Group at a price of 19.80 yuan per share, compared with a total of about 5.2 billion yuan. Today, Changyuan Group's share price is less than 6 yuan per share.

At the same time, Changyuan Group also revealed that the performance of its subsidiary is suspected of fraud. After the publication of the 2018 Annual report, the Shanghai Stock Exchange sent an inquiry letter to Changyuan Group, requesting Changyuan Group to respond to 23 issues, such as discrepancies in inventory accounts, inaccurate cost accounting, improper provision for goodwill impairment of subsidiaries, and so on. Recently, Changyuan Group was put on file for investigation.

At the same time, the financial situation of Changyuan Group is not optimistic. Changyuan Group's 2018 annual report shows that last year, Changyuan Group's net profit after deduction was 1.189 billion yuan, and there was a risk of goodwill impairment, and its goodwill closing balance was still as high as 3.07 billion yuan at the end of 2018. In addition, Changyuan Group's short-term borrowing is as high as 4.533 billion. It can be seen that in the short term, Changyuan Group still has a certain degree of repayment pressure.

"two years ago, Gree Group began to transform, creating a Gree investment as the main body of the financial investment plate, construction investment plate, island tourism plate and so on. Gree Group's main industrial investment direction is focused on new materials, health care and other industries, and is increasing investment in mergers and acquisitions, and Changyuan Group, which is mainly based on electric vehicle-related materials and new materials, is one of its goals. However, the situation of Changyuan Group is quite different from that of a year ago, and it is uncertain whether Gree will still achieve its set goals. However, it can be seen that Gree Group no longer wants to rely on Gree Electric, it is cultivating new growth points as soon as possible. " Liang Zhenpeng, an industry economist, said.

Transfer of equity in Gree Electric Appliances to raise funds?

It is worth noting that Gree Group's massive acquisition of Changyuan Group shares in the time point is also very sensitive, at that time Gree Electric Appliance is in the eve of mixed reform.

A few days ago, Gree Electric received investors interested in equity transfer in the conference room in Zhuhai, including Baidu, Temasek, Hillhouse Capital, Hopu Investment and so on. And the ultimate seller may be among them.

However, outside speculation, but also does not rule out the final Dong Mingzhu and concerted action to pick up the order.

"Gree Group plans to sell its shares in Gree Electric Appliances, which may also be directly related to its acquisition of Changyuan Group. Completely win the position of major shareholders of Changyuan Group, but also need a large amount of capital. At present, although Baima Gree Electric Appliance has been questioned by some institutions, it is generally still optimistic by the outside world, and the sale of major shareholders at this time may also be a consideration of capital. " An agency source said.

Liu Buchen, an industry expert, said that from the actions of the Gree Group, it can be seen that it is trying to get rid of its dependence on Gree Electric Appliances and cultivate another growth point as soon as possible. However, whether the new energy is in the right direction and whether the Changyuan Group is a good target. Further investigation is needed. At the same time, Gree Group is becoming an investment platform, and in Changyuan Group, Gree Group may be able to achieve more say than in Gree Electric Appliances.

Transfer Gree Electric Appliances shares to buy Changyuan Group Gree Group this move is dangerous?

Translation 08:33:13AM Jun 04, 2019 Source:Securities Daily

SMM News: Gree Group, which wants to transfer most of its equity in Gree Electric, has extended its hand to another listed company, Changyuan Group, and has been lurking for some time, but Changyuan Group has experienced frequent incidents.

Recently, Changyuan Group issued a "shareholder unanimous Action Agreement expires" announcement, the largest shareholder Tibetan Gold No. 1 and its 22 unanimous actors announced the expiration of the unanimous actor relationship. After the above-mentioned concerted action person dissolved the relationship of concerted action, the largest shareholder of Changyuan Group became Shandong Kexing Pharmaceutical Co., Ltd., which held about 103.43 million shares, accounting for 7.81% of the total share capital of the company. According to the list of the top 10 shareholders, the affiliated companies of Gree Group are also among them, and their holdings are close to the licensing line.

Gree Group wants to join Changyuan Group?

Changyuan Group shareholders in and out, so that the outside world is full of imagination.

According to the list of the top 10 shareholders of Changyuan Group on May 24, 2019, Zhuhai Gree Financial Investment Management Co., Ltd. (hereinafter referred to as "Zhuhai Gree Financial Investment Management Co., Ltd."), a wholly owned subsidiary of Gree Group, Gree Golden Investment) and Zhuhai Free Trade Zone Jin Nuoxin Trading Co., Ltd. (hereinafter referred to as Jin Nuoxin) are among the top 10 shareholders of Changyuan Group. Among them, the proportion of Glijin shares is 3.56%, the proportion of Jinnoxin shares is 1.40%. Gree investment and Jinnoxin are both owned by Gree Group, the two holding proportion has reached 4.96%, close to the licensing line.

Looking through the Changyuan Group's financial reports, it can be seen that Jinnoxin appeared in the top 10 shareholders of Changyuan Group as early as the first quarterly report this year, while Glijin Investment has not yet appeared. In other words, Gree Group in the last two months, and further increased its holdings of Changyuan Group.

At the same time, Gree Group is also planning the transfer of part of the equity in Gree Electric Appliances. Some analysts believe that Gree Group plans to transfer the control of Gree Electric, in order to obtain funds, and then increase the investment in Changyuan Group.

However, Changyuan Group appears to be quite calm. Its announcement on May 31 said that after the company's self-examination, the company's daily business activities are normal, the market environment, industry policy has not undergone major adjustments. In addition, the company has not planned mergers and acquisitions, share issuance, debt restructuring, business restructuring, divestiture and asset injection and other major issues.

At the same time of increasing the holdings of Gree Group, the major shareholders of Changyuan Group are also willing to withdraw. Recently, Changyuan Group issued a "shareholder unanimous Action Agreement expires" announcement, the company's largest shareholder Tibetan Gold No. 1 and its 22 unanimous actors announced the expiration of the unanimous actor relationship. After the dissolution of the relationship of concerted action, the largest shareholder of Changyuan Group became Shandong Kexing Pharmaceutical Co., Ltd., holding 7.81% of the shares in the company.

At the same time as the original major shareholders remove the relationship of concerted action, Gree Group has quietly approached the card line, a series of actions that make the outside world ponder: does Gree Group intend to win Changyuan Group to become its largest shareholder?

In fact, as early as May last year, Gree Group tried to buy Changyuan Group, at that time, Gree Group gave the reason is optimistic about the future of the company. In the end, the acquisition was terminated because Zhuhai state-owned assets did not agree with the acquisition proposal submitted by Gree Group.

Gree Group is still showing strong interest in Changyuan Group. In terms of share price, Gree Group announced at that time that it intended to buy 20 per cent of Changyuan Group at a price of 19.80 yuan per share, compared with a total of about 5.2 billion yuan. Today, Changyuan Group's share price is less than 6 yuan per share.

At the same time, Changyuan Group also revealed that the performance of its subsidiary is suspected of fraud. After the publication of the 2018 Annual report, the Shanghai Stock Exchange sent an inquiry letter to Changyuan Group, requesting Changyuan Group to respond to 23 issues, such as discrepancies in inventory accounts, inaccurate cost accounting, improper provision for goodwill impairment of subsidiaries, and so on. Recently, Changyuan Group was put on file for investigation.

At the same time, the financial situation of Changyuan Group is not optimistic. Changyuan Group's 2018 annual report shows that last year, Changyuan Group's net profit after deduction was 1.189 billion yuan, and there was a risk of goodwill impairment, and its goodwill closing balance was still as high as 3.07 billion yuan at the end of 2018. In addition, Changyuan Group's short-term borrowing is as high as 4.533 billion. It can be seen that in the short term, Changyuan Group still has a certain degree of repayment pressure.

"two years ago, Gree Group began to transform, creating a Gree investment as the main body of the financial investment plate, construction investment plate, island tourism plate and so on. Gree Group's main industrial investment direction is focused on new materials, health care and other industries, and is increasing investment in mergers and acquisitions, and Changyuan Group, which is mainly based on electric vehicle-related materials and new materials, is one of its goals. However, the situation of Changyuan Group is quite different from that of a year ago, and it is uncertain whether Gree will still achieve its set goals. However, it can be seen that Gree Group no longer wants to rely on Gree Electric, it is cultivating new growth points as soon as possible. " Liang Zhenpeng, an industry economist, said.

Transfer of equity in Gree Electric Appliances to raise funds?

It is worth noting that Gree Group's massive acquisition of Changyuan Group shares in the time point is also very sensitive, at that time Gree Electric Appliance is in the eve of mixed reform.

A few days ago, Gree Electric received investors interested in equity transfer in the conference room in Zhuhai, including Baidu, Temasek, Hillhouse Capital, Hopu Investment and so on. And the ultimate seller may be among them.

However, outside speculation, but also does not rule out the final Dong Mingzhu and concerted action to pick up the order.

"Gree Group plans to sell its shares in Gree Electric Appliances, which may also be directly related to its acquisition of Changyuan Group. Completely win the position of major shareholders of Changyuan Group, but also need a large amount of capital. At present, although Baima Gree Electric Appliance has been questioned by some institutions, it is generally still optimistic by the outside world, and the sale of major shareholders at this time may also be a consideration of capital. " An agency source said.

Liu Buchen, an industry expert, said that from the actions of the Gree Group, it can be seen that it is trying to get rid of its dependence on Gree Electric Appliances and cultivate another growth point as soon as possible. However, whether the new energy is in the right direction and whether the Changyuan Group is a good target. Further investigation is needed. At the same time, Gree Group is becoming an investment platform, and in Changyuan Group, Gree Group may be able to achieve more say than in Gree Electric Appliances.