Financial News Agency, December 15 (Reporter Xiao Lianghua) - Annell (002875.SZ), who relied on “anti-virus” fabrics at the end of last year and whose stock price rose by more than 250% within two months, has taken a new direction this time.

Annell announced this evening that the company plans to use 440 million yuan in cash to acquire 22% of the shares of Shenzhen Innovation Technology Co., Ltd. (Innovation Technology for short) in installments to enter the field of computing power across borders. At the same time, Annell announced that its wholly-owned subsidiary Annell Technology, as the equipment and software procurement agent for the computing power platform project, has signed contracts with the next company Henan Media Digital and Shangjia Innovation Technology, respectively. The contract amounts are 97.4653 million yuan and 87.718,800 yuan respectively.

“The first stock of children's clothing” enters computing power

Antiviral fabrics failed to revive the company, and Anna, the “No. 1 A-share children's clothing stock,” has once again set his sights on the field of computing power.

Regarding the latest cross-border acquisition, Annell said that Innovation Technology is a high-tech enterprise based on big data storage systems, integrating data centers, cloud services, and big data services. Its products and services are widely used in communications, finance, and Internet industries. This transaction is a preliminary test of the big data industry, as the company is optimistic about the development prospects of the big data industry.

In response, a person from a private equity agency in Qingdao told a reporter from the Financial Association that the risk factor for listed companies to blindly cross borders with hot spots is very high. “There are high risks in cross-border itself. In particular, the valuation of companies that are under bids on the market will be raised, and business risks are often covered up. Subsequent high growth may be difficult to achieve. Bloody examples abound. For example, many investments in cross-border photovoltaics last year have now been lost.”

According to the announcement, Innovation Technology achieved a net profit of about 75 million yuan in 2022, and a net profit of about 68 million yuan in the first half of this year. The assessed value of the company's total shareholders' equity on the evaluation benchmark date of June 30, 2023 was about 2,025 billion yuan. The book value of owners' equity in the consolidated statement on the evaluation reference date was less than 160 million yuan, and the valuation value increased by 1167.45%.

Although the profit of the Innovation Division may seem impressive, financial data show that its net operating cash flow was negative; in the first three quarters of this year, it was -22.27 million yuan.

In other words, Annell's investment of 440 million yuan across borders will bring huge goodwill to herself. Although the actual controller of the target company has signed a performance compensation promise, if later business performance does not fulfill the promise, Annell will also face the risk of impairment of goodwill.

Has the “anti-virus fabric” been falsified?

In August of last year, Annell announced the upcoming launch of an “antiviral” fabric — an electron-beam graft modified fabric. According to Annell, this fabric is the first application in the field of children's clothing. The inhibition rate of coated viruses, bacteria, and some fungi is over 99%. It has the characteristics of safety, non-release, long-term washing resistance, and broad spectrum resistance to virus mutations.

As soon as the news came out, it sparked a buzz in the market. The “anti-virus” concept enabled Annell to reap nine consecutive gains and stops, and the stock price rose by more than 250% within two months.

In April of this year, the company's “anti-virus” fabric was successfully mass-produced, and the first “ANTECH safety clothing” using this fabric was officially launched at the end of April. However, as of the end of the third quarter, this new technology and related new products had no outstanding performance.

According to financial reports, Annell achieved operating income of 564 million yuan in the first three quarters, a year-on-year decrease of 16.37%; net profit loss of 73.8 million yuan.

In the previous three years, Annell continued to lose money. From 2020 to 2022, Annell's revenue was 1,257 million yuan, 1,186 million yuan, and 938 million yuan, respectively; net profit was -468.15,900 million yuan, -3,0295 million yuan, and -237 million yuan, respectively.

It is worth noting that even though Annell has repeatedly disclosed the inhibitory effects of “antiviral” fabrics on related viruses, bacteria, etc., and that the technology has been assessed by the China Textile Industry Federation as “the technology is original” and “the overall level of the project has reached international advanced,” the controversy surrounding the concept of “anti-virus” has not stopped.

In terms of market performance, Annell stated on an interactive platform on November 21 this year that since safety clothing made using electron beam grafting technology was launched, sales in a single category have reached tens of thousands. Other production capacity released went to some of the early customers mentioned earlier, such as companies such as sunscreen clothing and business wear.

This kind of sales clearly did not satisfy investors, nor was it able to reverse the company's decline.

However, thanks to the rise in stock prices brought about by “anti-virus”, from November 2022 to February of this year, Ms. Long Yan, the company's director and deputy general manager, Ms. Xu Wenli, who holds 8.38% of the company's shares, and Cao Zhang, the company's actual controller, reduced their holdings several times.

Cross-border involvement in computing power is flourishing

Now, with the popularity of computing power, A-share listed companies have once again created a trend of cross-border computing power. Anna is not the first, and probably won't be the last.

A cursory review by a financial news agency reporter found that up to now this year, at least listed companies such as Pyramid Ham (002515.SZ), Lotus Health (600186.SH), and Hengrun Co., Ltd. (603985.SH) have successively crossed the field of computing power.

On December 11, Pyramid Ham issued an announcement stating that the company plans to use its own capital of 401.1 million yuan to subscribe Zhejiang Yindunyun Technology Co., Ltd. with an additional registered capital of 70 million yuan, and the remaining 331.1 million yuan will be included in Yindun Cloud's capital reserve.

According to reports, Yindun Cloud Company mainly provides secure, easy-to-use, and cost-effective model cloud computing platforms and integrated solutions for intelligent edge computing for groups such as industrial Internet and digital technology enterprises, financial customers, scientific research institutions, AI general models and industry model customers, etc., and is committed to building an artificial intelligence ecosystem integrating computing power scheduling, model services, and cloud digital intelligence.

Food companies that have reached out to the field of computing power in search of new ways include Lotus Health.

On June 30, Hangzhou Lotus Technology Innovation Co., Ltd. was established. The legal representative is Cao Jiasheng, with a registered capital of 120 million yuan. The business scope includes technical services, technology development, artificial intelligence application software development, data processing services, etc., and is wholly owned by Lotus Health Industry Group Co., Ltd.

Subsequently, on September 27, Lotus Kechuang signed a “Procurement Contract” with Xinhuasan Information Technology Co., Ltd., a holding subsidiary of Xinhuasan Group Co., Ltd. Both parties confirmed that under this procurement contract, Xinhua Information will deliver 330 Nvidia H800 GPU series computing power servers (each server contains 8 GPUs) to Lotus Science and Technology. The server purchase unit price under this procurement contract is 2.1 million yuan, and the total contract price is 693 million yuan.

Hengrun Stock's path to computing power is even more dramatic.

In August of this year, the company established a joint venture with Shanghai Liuzhu to establish Shanghai Run Liuft. Hengrun Co., Ltd. holds 51% of its shares. As a precision machinery manufacturer, Hengrun Co., Ltd. uses this cross-border computing power. Since then, the company's stock price has doubled in a short period of time. However, starting at the end of November, the company's stock price declined sharply. Up to now, the company's stock price has fallen by more than 50% compared to the year's high.

This is due to the company's involvement in insider trading that may be involved behind computing power. On December 5, Hengrun Co., Ltd. announced that it had received a notice from Chairman Cheng Lixin's family that Cheng Lixin was taken into criminal detention by the branch directly under the Changzhou Public Security Bureau on suspicion of insider trading. On the same day, the company learned that Zhang Yazhou, general manager of Shanghai Runliuzhu Technology Co., Ltd. (“Runliuft” for short), a holding subsidiary, was assisting the investigation by the branch office directly under the Changzhou Public Security Bureau. The details of the relevant case have yet to be further investigated by the public security authorities.