Caixin, July 29th - Meijin Energy(000723.SZ), which saw its share price slump after revealing first-half losses, has been hit by another bearish event: the controlling shareholder failed to fulfill its disclosure obligations after being informed of the passive reduction in its holdings, and received a warning letter from the Shanxi Securities Regulatory Bureau.

Meijin Energy, with a total market capitalization of less than CNY 20 billion, announced tonight that its controlling shareholder, Meijin Energy Group Co., Ltd. has recently received a Warning Letter from Shanxi Securities Regulatory Bureau for failing to fulfill its disclosure obligations in a timely manner. As a result, it has been imposed supervisory measures with warning letter issued, and its name has been included in the integrity archive of the securities and futures market.

The warning letter showed that from December 20, 2023 to December 27, 2023, Changcheng Guorui Securities Co., Ltd. took forced liquidation measures against the shares held by Meijin Energy Group in Meijin Energy through centralized bidding transaction, causing Meijin Energy Group to reduce its holdings by a total of about 12.1536 million shares, involving an amount of about CNY 81.082 million. Meijin Energy Group failed to fulfill its disclosure obligations after being aware of the risk of passive reduction in its holdings of Meijin Energy shares.

According to the announcement, as of now, Meijin Energy Group holds 1.646 billion shares of the company's stock, accounting for 38.05% of the total equity in circulation. After receiving the warning letter, the company's controlling shareholder took the matter seriously and will strictly follow the requirements of the Shanxi Securities Regulatory Bureau, learn from the lesson, strengthen the study of securities laws and regulations and form a written report, and timely report to Shanxi Securities Regulatory Bureau.

Last Friday evening (July 26th), the Shenzhen Stock Exchange gave a criticism to Meijin Energy group and will be recorded in the honesty archive of the listed company due to the above violations.

In fact, in the reply to the annual report inquiry letter published on June 5th, Meijin Energy had mentioned the agreement on stock pledge repurchase financing, stock income right transfer and repurchase business with Changcheng Guorui Securities Co., Ltd. The business has now been overdue, involving 0.848 billion pledged shares, and the overdue financing principal balance amounted to CNY 1.985 billion. According to the explanation given by Meijin Energy Group, even if the above-mentioned debt leads to the risk of forced liquidation, the other measures that Meijin Energy Group can take to maintain stable control rights include setting up warning mechanisms, communicating with the pledge holders in advance, etc.

According to Choice Data, the stock price of the company closed at 4.23 yuan today, while the average price during that period (December 20 to December 27, 2023) was 6.66 yuan.

According to the performance forecast, due to the overall downward trend in the market prices of coke and chemical products in China, Meijin Energy's operating income and net profit are expected to be lower than the same period last year, with a net loss of CNY 0.65 billion to CNY 0.85 billion in the first half of the year, as compared to a profit of CNY 0.373 billion in the same period last year.

Public information shows that Meijin Energy's main business is the production and sales of commodities such as coal, coking, natural gas and new energy vehicles, mainly hydrogen fuel cell vehicles. Last year, the company's revenue from the coking industry accounted for 97.91% of the total revenue, while the revenue from other industries accounted for 2.09%.

In addition, the redemption of Meijin Energy's convertible bonds has also attracted investors' attention. When asked about the delay in redemption of convertible bonds last Friday, Meijin Energy said on the interactive platform that the company is currently working on the confirmation of entitlement of the investors who have applied for redemption. Since some of the supporting materials provided by some investors do not meet the requirements of redemption, and in order to respect and protect the legitimate rights and interests of all investors, the company has been actively contacting investors who have submitted documents that do not meet the requirements, urging them to supplement the necessary materials, and will proceed with the follow-up process after the confirmation is completed.