Polaris solar PV net news: in the fundamentals of the industry downturn, 2012 is a foregone conclusion in cases, Feng’s family seems to have chosen the bigger losses quarter of 2012, to transfer a portion of the profits to the first quarter of 2013, trying to signal the reversal of the market performance of the company, while’s annual report in 2012 and 2013, while first-quarter released on April 25, 2013. In this way, its use of good first-quarter performance gradually reducing to 12 million shares
As a Solar Silicon material production, one of the leading enterprises in the field of processing equipment, raise 909 million Yuan IPO Dragon photoelectric (toast by the market on December 25, 2009, listed the day’s closing price of 26.99 dollars, later share price rose all the way to 38.49 dollars. However, with the photovoltaic industry to go downwards, the company’s share price continued to decline, its controlling shareholder, in trouble, the company was the media repeatedly questioned the violation.
End of the first quarter of this year, Feng Clan Dragon photoelectric stake drop to about 50 million shares, per cent of total equity of 25.3% and almost in a State pledge. Since March 3, 2014, TL-electro-optical stock has been delisted, announced to Noah Technology Ltd and Feng Jinsheng, Changzhou, said controlling shareholders equity transfer issues are still being negotiated, seems to be winding up of plans out of business. Once prosperous feng’s family is how we got to this point of it?
Deep pledge dilemma
Dragon optical’s listing, photovoltaic industry is in strong support of the national policy when the rapid growth of a King, benefiting from the sharp expansion in the middle and lower reaches of the enterprise and its spending spree on the upstream purchase orders, Dragon photoelectric continue to increase investment in projects to expand production capacity. In order to raise money, Feng clan since 2010 continues to pledge its shares held Dragon photoelectric, for associated businesses (huasheng fine ceramics technology in Jiangsu Province, Changzhou mosun solar materials limited), large customers (Jiangxi xuyang Reddy high-tech company limited) or Sky Dragon photoelectric guarantee their loan.
In September 2011, Noah technology and Shandong International Trust Co, signed the assembled funds trust, Lu Xin-Heng Xin 3rd TL-electro-optical stock right pledge contracts of shares, 12.5 million shares of its stock Dragon photoelectric (6.25%) for its loan pledge. The trust’s total issued amount of 100 million Yuan, for a period of 18 months, cordon and stop lines respectively fell to project investment amounts to pledge the stock market with a total value of 1.5 times and 1.4 times times. In other words, once the Dragon photoelectric shares fell to below 12 dollars, Noah technology is required to pay a deposit or additional shares of credit collateral, and as soon as prices fell to 11.2 Yuan, Noah had to fulfil its share buy-back obligations in advance of science and technology, or trust company may exercise the right to liquidate the pledged shares. As of October 11, 2011, Noah Dragon photoelectric science and technology has pledged days 57.6 million shares, 94.13% per cent of its stake in the company, accounting for 28.8% of the total share capital of the company.
With Noah technology is similar to Feng Jinsheng on February 16, 2012, 15.2 million shares of the company in trust-Shandong hengxin 3rd collection in trust program 14, was pledged. The trust has collected 83.2 million Yuan, the term for 18 months, cordon and stop lines similar conditions and previous trust contract, you can calculate the cordon to 8.21 Yuan, while the stop line at 7.66 Yuan. Feng Jinsheng fall into the plight of pledge, coupled with the pledge of shares, Feng Jinsheng had pledged Dragon photoelectric 25.21 million shares it held in the 25.2 million shares.
Happens is that the photovoltaic industry just started going cold from the second half of 2011. In 2012, under the impact of shrinking demand and overcapacity, increased competition in the industry, resulting in photovoltaic products continued to fall, sales plummeted. TL-entire industries are built around of photoelectric photovoltaic industry layout, so the impact is huge, price all the way down. On March 30, 2012, the company’s share price dropped below Noah technology trust pledge 11.2 exit line, starting in mid-July this year’s share price dropped below 7.66 Yuan Feng Jinsheng mortgage exit lines.
Chairman holdings difficult rescues
In days Dragon photoelectric shares below Noah technology of pledge stops line, and no reverse signs of situation Xia, company bulletin said, Chairman Feng Jin was born in April 27, 2012 to 10.08 Yuan of ASP holdings has 300,000 unit days Dragon photoelectric stock, accounted for total equity of 0.15%; while commitment Yu future 3 months within in shares below 12 Yuan/unit of conditions Xia continues to holdings 100,000-1.7 million unit, accounted for has issued shares of 0.05%-0.85%. It is easy to see, Feng’s family hope that the share price will go back to Noah’s mortgage equity line of science and technology.
At that time, the market information is a positive reaction, TL-electro-optical stock from April 27, 2012, the minimum price of 9.6 Yuan rose to its highest price of 10.66 Yuan on May 8, bounced around 10%, but then return to the downtrend, it is difficult to return. Indeed, Feng Jinsheng 9.11-9.54 Yuan on May 28, 2012 only increased the price of 217,000 shares, increase total equity amounted to 0.1084%, well below the 0.85% cap on holdings, is not additional holdings as the shares fell further after the number. Thus, Feng Jinsheng’s holdings are not optimistic about the company’s future, but to stimulate shares rose, trying to relieve the pressure of Feng’s family trust stops, its second increase is to a large extent in order to meet the commitment announcement before.
Delayed lifting stocks as falling
As of December 25, 2012 Dragon photoelectric listed for less than three years, technology and restricted stock held by Feng Jinsheng Noah on December 27 of that year to lift sales. Because of Feng’s trust pledge for the family needs a lot of money to fill the holes and are expected once the ban expires, companies will face heavy selling.
What’s interesting is, fiduciary pledge 7.66 Yuan after being below the stop line, Feng Jinsheng on September 27, 2012, additional commitments, within 6 months after the first limited without reduction, its shares to extend the locking period on June 25, 2013, trying to slow the market worries about upcoming divestments. In fact, he was almost their entire stock in the pledge, nor to reduce. Round the announcement caused the company’s share price rebounded. However, Dragon optical in 2012 when the three quarterly reports revealed that thanks to the photovoltaic industry downturn, has formed a larger loss in the third quarter before it expects 2012 loss of 1.15-130 million yuan in net profit.
Shares hold, until December 4, 2012 reach its nadir 5.21 Yuan. In hindsight, Feng Jinsheng Tianlong electro-optical stock, on February 16, 2012 pledge of 15.2 million shares in 2013, 7 August, Shandong provincial international trust company limited through the transfer of Justice and explains Feng Jinsheng was no other assets to fill the hole in the pledge can only be expected to rebound in stock prices for their salvation.
Fill the reduction of actuarial debt
Bifengjinsheng lucky, Noah technology is a certain maneuver. On January 10, 2013 Noah bulletin reduction plan of science and technology, plans in the next 6 months, a fall of no more than 16 million shares (8%) TL-electro-optical stock.
Noah technologies on July 13, 2011, pledged to the 4 million shares of Shanghai Pudong Development Bank Zhengzhou branch TL-electro-optical stock, on February 5, 2013, rescinding the hypothecation. Noah technology day to the low price of 5.72 Yuan per share aggregate reduction of block trading platform, 22.88 million Yuan.
Based on this funding, Noah technology prior to April 26, 2013 (a day after the quarterly disclosure) previously pledged to the 6 million shares of Shandong provincial international trust, TL-electro-optical stock about rescinding the hypothecation, to 5.51 Yuan on May 3, the price of sale, 33.06 million Fund. Subsequently, on May 6 from the Shandong international trust and lifted the pledged 6 million shares, and the price of 5.72 Yuan on May 9 all sold. Noah technology by reduction with 90.26 million Yuan altogether these three funds, used to fill Lu Xin-Heng Xin 3rd trust equity debt.
The drop process, giving the market a good key performance expectations, in order to avoid reduction of the expected impact on the share price. In the fundamentals of the industry downturn, 2012 is a foregone conclusion in cases, Feng’s family seems to have chosen the bigger losses quarter of 2012, to transfer a portion of the profits to the first quarter of 2013, trying to signal the reversal of the market performance of the company. Dragon photoelectric 2012 seasons has reported only 5 million yuan of business revenue, coupled with asset impairment losses of up to 325 million dollars, while a loss of 426 million Yuan, and brought the year’s loss of 511 million Yuan, much larger than three quarterly losses disclosed by the expected value. And by the year 2013, a quarter, the company’s operating revenue reached 114 million dollars, only a slight loss of 10.6 million dollars, operating conditions improved significantly.
TL-electro-optical reduction of large shareholders in order to successfully, well-designed financial statement disclosure will’s annual report in 2012 and 2013, while first-quarter released on April 25, 2013. In this way, von’s family used a quarterly achievement plus a succession of reduction of 12 million shares.
Bend over backwards avoiding losing shell
Noah technologies funded by a share reduction trust debt, Dragon photoelectric began planning how to profit in 2013, so as to avoid being delisted alert special treatment. Although the company has transferred a portion of the profits from the end of 2012, but photovoltaic industry fundamentals have not significantly improved. In addition, ST Suri’s potential debt default may also lead to massive bad debts incurred by TL-electro-optical, the company still faces the risk of losses.
At this point, the method is ‘ strong profitability of assets through asset restructuring, at the end of the newly acquired assets can be included in the consolidated financial statements, improving the profitability of listed companies. On June 3, 2013, sky Dragon photoelectric material asset reorganization of business planning, major programmes are of Dalian City link existing shareholders additional shares acquired 100% of its shares. However shortly after June 26, Dragon photoelectric resumption announce restructuring plan failed, reason: certain conditions have not been ripe, does not meet the time completing a major reorganization of the standards specified in the regulations.
Another method is to try to increase revenue, reduce costs, enable companies to avoid loss. On November 1, 2013, sky Dragon photoelectric announced a partnership with Shanghai chaori signed a two-year cooperation agreement on production and operation. Under the agreement, the Shanghai chaori provide 770 million dollars worth of plant, equipment, Dragon photoelectric in Shanghai chaori Payables to the company to reduce its 33.12 million Yuan/year depreciation expense. This can minimize the Super day for up to 115 million dollars in receivables provision for doubtful accounts 3–4 million dollars. November 22, 2013 Dragon photoelectric bulletin, co-production with the Shanghai chaori Convention rights entrusted Feng Jinsheng’s son Feng constant power controlled affiliates. Under the agreement, constant power will pay a management fee to the 36 million yuan per year, two-year totals of 72 million Yuan. In this way, companies do not have to set aside hefty bad debts, it can also increase revenue.
Thus, according to announcements published on November 5, 2013, forecasting 50.01 billion yuan net profit in 2013, 2013 annual results have improved customer situation of the photovoltaic industry has gradually improved since the second half of, the company increased inventory, and through a variety of channels receivable to dispose of part of idle assets. Notice also pointed out that the non-recurring profit and loss effects on the net profit amount is expected to be approximately 6-7 million Yuan, mainly for the company’s land transfer revenue and Government subsidies. While the first three quarters of the company’s total non-recurring profit and loss is 20.93 million Yuan, means that companies in the four quarters will be 40 million or 50 million of non-recurring profit and loss. Affected by this impact, TL-opto-electronic equities trading on the day. Technology stocks stage rally came as Noah, and again on December 6, 2013 at 9 per cent of the price reduction of 3 million shares.
Auditors meet resistance no turning back
Dragon photoelectric 2013 results letters were disclosed on February 28, 2014, is expected to achieve revenues of 337 million dollars, rose 91.6% to achieve 6 million yuan in net profit attributable to shareholders of listed companies, rose by 101.2%. This November 5, 2013 issued in advance of their results were consistent. Dragon optical’s closing stock price on that day to 9.92 Yuan. Surprising is that express comes just a week after the disclosure of performance on March 7, Dragon photoelectric announcements intended to dismiss Lixin accounting firm showed that Ericsson does not agree to issue an auditor’s report the company thought.
Dragon photoelectric to pay 700,000 Yuan hsing Hua certified public accountants for the 2013 should be employed instead of auditing firms, but also did not cooperate with the long days of zhongxinghua taking up optical wheel. Dragon optical performance bulletins were released on April 22 and 25th, respectively, revision notes and 2013 annual report in 2013, only 221 million yuan of business revenue, a loss of 130 million yuan in net profit, leading Dragon photoelectric became the first two consecutive years of losses, being delisted alert specifically to handle the growth enterprise market.
So far, the company’s controlling shareholder, also appears to be turning back without surgery, only “just walk away”. (The author, Associate Professor of accounting and Finance Department of Shanghai Jiaotong University)
Original title: Dragon photoelectric fall mystery