“Science and Technology Innovation Board Daily”, May 1 (Reporter Wu Xuguang) On the evening of April 30, Ruilian New Materials issued an announcement stating that it plans to plan important control changes and is expected to suspend trading for about 5 trading days.

Ruilian New Materials said that the company's shareholders Zhuo Shi Hou, Guofu Yongyu, and Liu Xiaochun plan to transfer part of their company shares to Qingdao Development Zone Investment and Construction Group Co., Ltd. (hereinafter referred to as “Kaitou Group”); after the transfer is completed, Zhuo Shi Partnership plans to entrust the voting rights of the remaining company shares to the Development Group; if the company plans to issue shares to specific targets in the future, Kaitai Group plans to subscribe to all of them.

“If all of the above matters are finally settled, it may lead to a change in the company's largest shareholder and control.” New materials added by Ruilian.

The “Science and Technology Innovation Board Daily” reporter further interviewed Ruilian New Materials on the above matters. As of press time, there was no response.

“The transfer of actual controllers by listed companies has a huge impact, because the asset structure, main business, and staffing involved may all undergo major changes.” Wang Jiyue, a senior investment banker and former sponsor representative, said in an interview with the “Science and Technology Innovation Board Daily” reporter that the starting point of a general transfer is not limited to considering many factors such as enterprise management, majority shareholders themselves, industrial mergers, acquisitions and restructuring, and backdoor listing.

Frequent actions to “divorce” and cancel the “Actors in Accord” agreement

The “Science and Technology Innovation Board Daily” reporter discovered that although Ruilian's change of ownership was somewhat sudden, it was not untraceable.

As early as July 2023, Ruilian New Materials issued an announcement stating that the “Concerted Action Agreement” between the company's actual controllers Liu Xiaochun, Lu Haoping, and Li Jianing will not be renewed after it expires; it was originally changed from joint control by three actors to no actual controller.

Specifically, before the “Concerted Action Agreement” expired, the actual controllers of Ruilian New Materials were Lu Haoping, Li Jianing, and Liu Xiaochun. Lu Haoping and Li Jianing are the actual controllers of Fuqing Zhuoshihengli Investment Fund Management Center (hereinafter referred to as “Zhuo Shihengli”). Through Zhuo Shihengli, they control 19.52% of the shares of Ruilian New Materials; Liu Xiaochun directly holds 6.52% of the issuer's shares, and the three control 26.07% of the company's shares in total.

At the time, Ruilian New Materials Securities Department staff publicly stated that the absence of an actual controller was due to objective conditions, and that the company would achieve stable operation of the management and board of directors under a diversified shareholding structure in the future.

After a lapse of 4 months, in November 2023, Ruilian New Materials issued an announcement stating that the actual controllers of Zhuo Shi Partner, the largest shareholder of the company, were changed from Lu Haoping and Li Jianing to Lu Haoping because of the divorce between Lu Haoping and Li Jianing, the legal concerted action relationship was dissolved, and related arrangements were made on matters such as property division.

It is worth mentioning that the simplified equity change report revealed that Lu Haoping directly held 0.01% of Ruilian New Materials's shares and 2.2% indirectly through Zhuo Shi Partners; Li Jianing held 12.39% of Ruilian New Materials's shares indirectly through Zhuo Shi Partners. As of November 13, 2023, on the day the company issued the announcement, the closing price of Ruilian New Materials was 33.72 yuan/share, with a total market value of about 4.637 billion yuan. Based on this calculation, the market value of Lu Haoping's shares in Ruilian New Materials is about 102 million yuan; the market value of Li Jianing's shares is about 575 million yuan.

By implication, the marriage change of the actual controller, the largest shareholder of Ruilian New Materials, was mainly affected by the division of property. “As for the actual controller of Zhuo Shi Partner, the largest shareholder of Ruilian New Materials, the benefit for the actual controller is that the shares in their hands can be monetized.” Wang Jiyue said.

And this is exactly what ordinary investors are most concerned about, whether the “sky-high break-up fee” will bring about a significant reduction in holdings.

Ruilian New Materials announced on February 22 this year. On March 4, the company lifted the listing ban on 35.794,900 restricted shares. The unbanned shareholders were Zhuo Shihengli and Liu Xiaochun, respectively, accounting for 26.09% of the company's total share capital.

However, looking specifically at the types of restricted shares, the company added promises to list and circulate restricted shares.

The “Science and Technology Innovation Board Daily” reporter combed through the company's prospectus and found that Zhuo Shi Partner, the largest shareholder of Ruilian New Materials, promised at the beginning of the listing that within two years from the expiration of the lockdown period, if the pre-initial shares were reduced, the reduced holdings price should not be lower than the issue price of the company's initial public offering.

In terms of secondary market performance, as of April 30, Ruilian New Materials's stock price was 36.12 yuan/share, with a market capitalization of 4.869 billion yuan, up 1.57%. Compared with the issue price of 113.72 yuan/share, it has already fallen 68.24%, and has been in a broken state for a long time.

Qingdao's state-owned assets plan to take over

The background of the proposed share transferee has attracted market attention. Judging from the status of the recipient of this transaction, the Investment Group is a local state-owned holding company and has played the role of a “firefighter captain.”

According to the official website of Kaitou Group, it was founded in May 2017 with a registered capital of 2 billion yuan. It is a state-owned enterprise belonging to the West Coast New Area of Qingdao City, and currently has an annual revenue of about 12 billion yuan.

According to public information, in recent years, the Kaitou Group has been developing strongly. On the one hand, Kaitou Group mainly undertakes infrastructure construction and state-owned assets management functions in the Qingdao Economic and Technological Development Zone; on the other hand, Kaitou Group actively participates in market-based real economy business operations through industrial layout and integration of high-quality industrial resources of state-owned enterprises in the merger and acquisition area.

Among them, in January 2023, Kaitou Group participated in and completed the acquisition of a controlling interest in Shenghua New Materials; in July 2023, Kaitou Group completed the bankruptcy and restructuring of Qingdao Jieneng Steam Turbine, achieving wholly-owned ownership of the latter.

In response, some market analysts told the “Science and Technology Innovation Board Daily” reporter that in the current market economy environment, it is a situation where risks and opportunities coexist for the long-term development of some enterprises. Especially when business performance is stuck in a quagmire for a long time, they may be able to make a second leap forward by relinquishing control of the company, and choosing to change to some state-owned holding subsidiary with strong financial strength is a good choice.

However, it is quite difficult for the Kaitai Group to acquire Ruilian New Materials. At this stage, Ruilian New Materials's operating performance and stock price are both under pressure.

Ruilian New Materials landed on the Science and Technology Innovation Board on September 2, 2020. Its main business includes three major sectors: display materials, pharmaceutical CDMO, and electronic chemicals.

On the evening of April 29th, Ruilian New Materials revealed its 2023 annual report. Financial reports show that the company's net revenue and profit both declined, achieving revenue of 1,208 billion yuan, a year-on-year decrease of 18.39%; net profit to mother was 134 million yuan, a decrease of 45.57% year-on-year.

Regarding changes in performance, Ruilian New Materials said that the main reason for the change in revenue was the decline in sales in the display materials sector due to the continued lukewarm demand for downstream terminal consumer electronics in the display materials industry.

The gross margin level of Ruizlian New Materials is at a low level. According to the annual report, the company's gross margin in 2023 was 35.18%, a decrease of 3.54 percentage points from 2022. According to the company, the main reason for the decline in gross margin was the decline in revenue, the weakening of the company's overall production scale effect, and the increase in direct labor per unit and unit manufacturing costs, which led to a year-on-year decline in gross margin.

As of the first quarter of 2024, Ruilian New Materials achieved revenue of 328 million yuan, an increase of 19.77% year on year; net profit to mother was 34 million yuan, an increase of 144.17% year on year.