"Violation" Theme: Hand-in-hand to teach you to identify the restructuring traps of listed companies
The stock market is volatile, and the market capital has a keen sense of smell. Stocks involving popular themes, favorable policies, and restructuring concepts are often sought after by investors. Among them, the restructuring concept has an immediate impact on the stock price. The disclosure of the restructuring plan has brought the stock price N to continue to be normal, but once the restructuring aborts or fails, the stock price will fall off cliffs. The thrilling roller coaster trend challenges the small hearts of investors. In order to avoid becoming the high stock price receiver of the company's restructuring, investors need to train their eyes to identify restructuring traps.
Take the reorganization of a forestry company's acquisition of a flower grower in the same area as an example. The plan is a merger in the same industry. The forest product industry and the flower industry are organically combined, which perfectly fits the State Council's spirit of supporting the agricultural industry to form large enterprise groups through mergers and reorganizations. From the company level, the program is not "sexy", and from the national level, its significance is not far-reaching. But the final result was that less than one month after the plan passed the general meeting of shareholders, the company applied to the China Securities Regulatory Commission to withdraw the application materials, on the grounds that the counterparty requested the reduction or cancellation of profit compensation obligations. At this time, the company's stock price has risen from 15 yuan before the suspension to 20 yuan, and it rose to 27 yuan during the period.
A few months later, the listed company was filed for investigation by the China Securities Regulatory Commission for allegedly violating securities laws and regulations. A year later, it was administratively punished by the China Securities Regulatory Commission due to false records in the restructuring report. It turns out that this flower grower’s restructuring target has been inflated revenue in the past two or three years. Under the direction of the chairman of the board, the financial staff, sales staff, and distributors staged a fictitious show of receipt, delivery and cash flow. According to the investigation by the China Securities Regulatory Commission, the inflated proportions of the business income of the flower growers’ restructuring targets from 2012 to January to September 2014 were 15.93%, 14.76%, and 13.96% respectively. The listed company and related parties, as well as the reorganization targets and related parties, He was given administrative punishment by the Securities Regulatory Bureau and disciplinary action by the Exchange.
How to understand the reorganization plan of listed companies, we might as well start from the following aspects:
Take a look at the history of the subject. According to media reports, the flower grower had planned an overseas listing in 2008, and entered the queue of IPO filing companies announced by the China Securities Regulatory Commission in 2012. The review was terminated during the financial inspection in 2013 and then planned with another listed company. Reorganization failed. The target has repeatedly rushed to the capital market without success, and there must be reasons for repeated battles and defeats.
Second, look at the target industry. The periodicity, regionality and volatility of the performance of agricultural enterprises are usually relatively large; at the same time, in view of the special characteristics of agricultural enterprise companies such as large cash expenditures and difficulty in auditing and verification, the financial affairs of agricultural enterprises are prone to fraud. As in the aforementioned case, the underlying inventory balance is as high as 400 million yuan, accounting for 60% of the total assets, involving millions of orchids, and the price difference between different varieties is huge. Accountants lack the professional ability to distinguish all orchid species, and it is difficult to confirm the value of inventory. In addition, the target company’s sales channels and sales growth mainly rely on distributors and wholesalers, mainly self-employed. The target company’s cooperation and management with distributors and wholesalers, whether the target company can provide true and accurate income data, etc. Big risk.
Third, look at the profitability of the target. According to media analysis, affected by the slowdown in macroeconomic growth and the tightening of Sangong consumption, the flower market, especially the high-end orchid market, has experienced a rapid decline and is in a state of oversupply. The clues can also be seen from the disclosure of the restructuring report. Compared with the previous year, the unit prices of major orchid varieties have shown signs of being cut in half and are continuing to decline, but the sales volume has not increased significantly. But under this circumstance, the value-added rate of the target company as a traditional agricultural enterprise has reached more than 90%, and it has promised an annual performance of 100 million yuan and an increase of more than 10%, which must make people vigilant.
Fourth, look at the target financial data. According to the disclosure in the restructuring report, the target company’s operating income and accounts receivable in the past two years have increased slightly, but accounts payable have dropped rapidly. The balance of accounts payable in the most recent period has been zero, and long-term borrowings The doubling of the growth has led to a continuous decline in the net cash flow generated by the company’s operating activities. The most recent period was a net outflow, but the net cash flow generated by financing activities has increased. The above slightly weird financial data can not help but make people wonder: What kind of credit policy is between the company and its suppliers, distributors, and wholesalers, resulting in the company being increasingly short of money despite the slight increase in operating income , Do not hesitate to raise large debts, does this conform to business logic?
According to current regulations, the company will continue to suspend trading after the reorganization plan is disclosed, and trading will resume after replying to the exchange's inquiry letter and revising the restructuring plan. Therefore, the quickest and most efficient way to interpret the restructuring plan is to read the inquiry letter from the exchange. The lower-risk plan usually has fewer questions, and the higher-risk plan usually has a large-scale inquiry letter. Ask in the end. When you see this kind of inquiry letter, you have to keep your eyes open and wonder whether you will vote with your hands or your feet after the trading resumes. (Source: SFC website)
