Source: Broker China
Author: Zhou Le

The Hong Kong stock market staged a frightening scene.

At the end of April 9th,$CHINA TIANRUI (01252.HK)$It suddenly crashed. The stock price plummeted from HK$4.92 per share to HK$0.048 per share in just 25 minutes, the biggest drop in the intraday period. In addition, the stock prices of Hong Kong stocks Horson Fintech and Zhongmu International also experienced a flash crash. By the close, the declines had reached 90.96% and 45.5% respectively. The total market value of the three stocks had evaporated HK$15.6 billion.

According to the news, China Tianrui Cement's latest financial report shows that its turnover for the full year of 2023 was 7.889 billion yuan, down 28.6% from the previous year; the annual loss was 634 million yuan, which changed from profit to loss over the previous year.

It is worth mentioning that Li Liufa, the actual controller of Tianrui Cement in China, is a super-rich person in Henan. According to the newly released “2024 Hurun Global Rich List”, Li Liufa and Li Fengyi ranked 900 on the list with a wealth of 27 billion yuan. In addition, Li Liufa was twice named the richest man in Henan on the “New Fortune 500 Rich List” by “New Fortune” magazine in 2011 and 2012.

A horrible scene

At the end of April 9, the volume of China Tianrui Cement suddenly collapsed. The intraday low fell to HK$0.035 per share, a record low, with the biggest drop of 99.3%. At the close, the decline was still 99.04%, at HK$0.048 per share, with a full day turnover of HK$24.38 million. The total market value remained at HK$141 million, leaving a total market value of HK$14.55 billion in a single day.

As can be seen from the timesharing chart, before 15:45 today, China Tianrui Cement's stock price had been stable, remaining at around HK$5; starting at 15:45, the company's stock price suddenly crashed, falling from HK$4.92 per share to HK$0.048 per share in just 25 minutes.

According to the news, China Tianrui Cement previously announced its full year results up to the end of December last year, with annual turnover of 7.889 billion yuan, down 28.6% year on year; annual loss of 634 million yuan, up 449 million yuan in the same period last year, changing from profit to loss year on year; loss of 22 points per share, with no dividends.

In 2023, the Group's gross profit was about 1,629 billion yuan, a decrease of 1,085 billion yuan or 40% compared to about 2,714 billion yuan in 2022. The company's gross margin fell from about 24.5% in 2022 to about 20.7% in 2023. The decline in gross margin was mainly due to the fact that the decline in cement prices in 2023 was greater than the reduction in the cost of one ton of cement.

According to reports, China Tianrui Cement is mainly engaged in the mining and utilization of limestone and the production and sale of clinker and cement, and occupies a leading position among cement clinker manufacturers in Henan and Liaoning provinces. According to data from Henan Province and the Liaoning Cement Association, the company is the largest clinker producer in Henan and Liaoning provinces. The company's clinker production lines all use advanced NSP technology, and all are equipped with waste heat recovery technology, which can effectively save electricity costs and minimize pollution.

China Tianrui Cement has 8 cement manufacturers including Ruzhou, Lushan, Weihui, Zhoukou, Shangqiu, Zhengzhou, and Shilong districts, and a 5000t/d cement clinker dry process production line under construction in Dalian.

According to a previous research report by Huatai Securities, it is estimated that the overall supply and demand relationship in the cement industry is still under pressure in 2024, and the profitability of the domestic market may still be bottoming out. Enhancing the competitiveness of the main business and speeding up the cultivation of new growth poles may still be a priority task. Due to a lower price starting point before the Spring Festival and slower price recovery after the holiday season than in previous years, it is expected that most cement companies' profits in the first quarter of 2024 will decline the same or month-on-month, and the industry's losses may expand further.

It is worth noting that the Hong Kong stock market today$HAOSEN FINTECH (03848.HK)$,$CHINA WOOD INT (01822.HK)$The stock price also experienced a flash crash and plummeted. By the close, the declines reached 90.96% and 45.5% respectively, and the total market value evaporated to HK$837 million and HK$243 million respectively. Based on this calculation, the total market value of the above three individual stocks had evaporated HK$15.6 billion.

The actual controller was once the richest man in Henan

It is worth mentioning that Li Liufa, the actual controller of Tianrui Cement, is a super-rich person in Henan.

According to the newly released “2024 Hurun Global Rich List”, Li Liufa and Li Fengyi ranked 900 on the list with a wealth of 27 billion yuan. In addition, Li Liufa was twice named the richest man in Henan on the “New Fortune 500 Rich List” by “New Fortune” magazine in 2011 and 2012.

On December 8 last year, China Tianrui Cement issued an announcement stating that the corporate restructuring was completed on December 8, 2023. The corporate restructuring aims to simplify the shareholding structure for controlling shareholders. According to the corporate restructuring, Li Liufa and Li Fengyi are still the ultimate beneficial owners of Yu Kuo, the controlling shareholder of the company.

China Tianrui Cement stated in the announcement that prior to the restructuring, Mr. Li and Mrs. Li were the ultimate beneficial owners and held a total of 69.58% of the company's issued share capital through Tianrui Group Corporation, Tianrui International, Condor, Yu Qi and Yu Kuo.

According to reports, Li Liufa, a native of Pingdingshan, Henan, was born in June 1957 and graduated from Henan University. He is currently the chairman of Tianrui Group and a non-executive director of China Tianrui Group Cement Co., Ltd.

In 1994, Li Liufa took over the Baiyunshan cement factory, a township enterprise, and began entering the cement sector. Since then, Li Liufa's industry gradually expanded, and Tianrui Group came into being.

At present, Tianrui Group has developed into a Chinese private enterprise giant, ranking in China's top 500.

According to the official website, Tianrui Group was founded in 1982 and is a joint-stock enterprise group integrating industries such as green building materials, foundry (intelligent manufacturing), Internet technology, cultural tourism, etc., and is ranked 380 in the top 500 Chinese enterprises and 195 in the top 500 Chinese manufacturing companies. In 2020, it won the 6th “China Industry Awards Commendation Award”.

Tianrui Group penetrates next-generation information technology such as cloud computing, big data, and artificial intelligence into every core aspect of enterprise development, and explores a digital transformation model that matches the characteristics of Tianrui's industry. It has successively completed Tianrui Group's financial business integration, digital factory and group control, smart factories, and the construction of an industrial Internet platform for the building materials industry. 16 enterprises were selected as smart factories in Henan Province.

In the newly released list of the 2023 Top 500 Chinese Enterprises and the 2023 China Top 500 Private Enterprises, Tianrui Group Co., Ltd. ranked 380th and 181st respectively in the country with operating revenue of 60.1 billion yuan.

In addition, the company was also shortlisted in the 2023 China Top 500 Manufacturing Enterprises and 2023 China's Top 500 Private Manufacturing Enterprises, ranking 195th and 121st respectively in the country.

Editor/jayden