Caixin reported on July 23rd that the stocks facing "face value delisting" risk and are priced at less than 1.50 yuan are seeing continued action.

Last night, Nanjing Putian Telecommunications B (200468.SZ) announced that it plans to transfer all the equity of South Man company in the electrical sector by cash and maintain the remaining business. The company stated that this transaction constitutes a major asset restructuring and will help enhance the company's asset liquidity, improve the quality of assets and the profitability capacity. Oriental Group Incorporation (600811.SH) also announced the recruitment and selection of restructuring investors, which will accelerate the company's pre-restructuring and restructuring processes. Dongguan Kingsun Optoelectronic announced its repurchase plan and signed a strategic cooperation agreement with Lenovo Wisdom City Technology Co., Ltd. Today, all three of these stocks closed at the limit up. Caixin reporters noted that the strategic cooperation agreement between Dongguan Kingsun Optoelectronic and Lenovo Wisdom City is a framework agreement that does not involve specific amounts. Dongguan Kingsun Optoelectronic also told Caixin reporters, who asked as investors, that it could not predict how much business would be brought to the company through this framework agreement.

Caixin reporters noticed that the strategic cooperation agreement between Dongguan Kingsun Optoelectronic and Lenovo Wisdom City is a framework agreement that does not involve specific amounts. Dongguan Kingsun Optoelectronic also told Caixin reporters, who asked as investors, that it could not predict how much business would be brought to the company through this framework agreement.

Like some non-ST companies that are facing the challenge of 'face value delisting' in the capital market recently, Dongguan Kingsun Optoelectronic has weak fundamentals, with three of the past five years showing losses, and large fluctuations in performance.

Last night's announcement shows that Dongguan Kingsun Optoelectronic plans to repurchase shares for 30 million-50 million yuan, and the repurchase price will not exceed 2.29 yuan/share; its wholly-owned subsidiary Kingsun Optoelectronic and Lenovo Wisdom City jointly signed a "Strategic Cooperation Framework Agreement", formally forming a strategic partnership to strengthen bilateral business in new smart city fields such as intelligent transportation, smart venues, smart municipal, smart tourism, urban renovation, at home and abroad.

Kingsun Optoelectronic said that the repurchase plan is to maintain the company's value and the rights and interests of all shareholders, based on its confidence in the company's future development prospects and its recognition of the company's value.

However, the company stated that the repurchased shares will be sold at an appropriate time according to relevant rules 12 months after the announcement of the repurchase results and equity changes. If the repurchased shares cannot be used for the above purposes within the time limit stipulated by relevant laws and regulations, the un-sold shares will be cancelled by law.

On the secondary market, Dongguan Kingsun Optoelectronic's stock price has been in a continuous downward trend, with a maximum decline of more than 50% this year. The closing price on July 22nd was 1.44 yuan/share. Some investors expressed concern that it faces the risk of face value delisting.

From a fundamental perspective, Kingsun Optoelectronic's profitability in its main business of semiconductor lighting is weak. In 2022, benefiting from investment income brought by the spin-off of off-campus education and training business and exchange gains and losses brought by dollar appreciation, Kingsun Optoelectronic's net income attributable to the parent company increased significantly and recovered to profit, with 0.043 billion yuan in profits. However, in 2023, the company's net income attributable to the parent company again showed a loss of 0.059 billion yuan.

The latest 2024 interim performance forecast shows that Kingsun Optoelectronic expects its non-net profit for H1 2024 to grow by 53.9% to 40.72% YoY (a reduction in losses), but it will still be a loss of 45 million yuan-35 million yuan.

However, it is worth noting that Shandong Provincial Financial Asset Management Co., Ltd., the original creditor of Kingsun Optoelectronic, has become an important shareholder of the company (holding 7.52% of the shares) by participating in several auctions in 2024. Public information shows that Shandong Financial Assets Management Co., Ltd. was established in 2014 and is a provincial-level financial asset management company with the qualification to mass-operate non-performing assets of financial enterprises in the province, as announced by the former China Banking Regulatory Commission.

Some investors are hoping that the local AMC companies becoming important shareholders can bring changes to Kingsun Optoelectronic.