① Market analysts believe that under tremendous financial pressure, Hesheng Silicon is still spending huge sums of money to buy back shares, which is directly related to the large decline in the company's stock price; ② Hesheng Silicon was recently excluded from the Shanghai Stock Exchange 50 Index due to shrinking market capitalization; ③ Since this year, Hesheng Silicon has frequently disclosed shareholders' equity pledges and release of pledges.
Financial News Agency, December 11 (Reporter Wang Bin) Stock prices are falling and falling, and financial pressure is high. How can we resolve the double dilemma? Hesheng Silicon (603260.SH) is trying to unravel with repurchases of no more than 1 billion yuan.
Market analysts believe that Hesheng Silicon is under tremendous financial pressure and does not hesitate to spend huge sums of money to buy back shares. This is directly related to the large decline in the company's stock price. Its move is aimed at boosting market confidence.
This evening, Hesheng Silicon announced that it plans to repurchase some of the issued A-shares through centralized bidding transactions with its own funds for employee stock ownership plans or equity incentives. The total capital used for the repurchase shall not be less than 500 million yuan, not more than 1 billion yuan, and the repurchase price shall not exceed 80.40 yuan/share; the proposed repurchase period shall not exceed 12 months from the date of review and approval of the current share repurchase plan.
According to the estimate of the lower upper limit of the repurchase amount and the upper limit of the repurchase price this time, the number of repurchases of Hesheng Silicon Industry is about 6.2189 million shares to 12.437,800 shares, accounting for about 0.53% to 1.05% of the company's current total share capital.
A week ago, on December 5, Hesheng Silicon disclosed that Luo Liguo, the company's actual controller and chairman, proposed to repurchase shares. The next day, the company's stock price rose 2.5%.
It should be pointed out that currently, Hesheng Silicon is facing serious challenges.
In the first three quarters of this year, Hesheng Silicon's revenue increased year on year, but net profit was “undercut” compared to the same period last year. Data show that from January to September 2023, the company achieved revenue of 19.886 billion yuan, up 8.81% year on year; net profit was 2.185 billion yuan, down 52.03% year on year.
At the same time, the company's financial pressure is increasing. As of the end of September 2023, Hesheng Silicon had total liabilities of 43.939 billion yuan, of which current liabilities totaled 19.849 billion yuan, while the company's monetary capital and transactional financial assets totaled only 3,988 billion yuan.
On the other hand, Hesheng Silicon is still investing heavily and expanding production. As of the end of August this year, the total investment in major projects disclosed by the company reached 82,017 billion yuan. However, in these two years, the price of silicon materials has continued to plummet, and the market's expectations about the future trend of silicon materials are pessimistic.
To make matters worse, in November of this year, a “black swan” incident occurred in Hesheng Silicon Industry — the family of Fang Hongcheng, the company's former general manager, made a real-name report, causing the Hesheng silicon industry to be in turmoil, and the company's stock price plummeted in response.
Looking at it over a longer period of time, in the past two years, Hesheng Silicon's stock price has fallen by more than 81%, and its market value has evaporated by about 221.8 billion yuan. Due to a severe decline in market capitalization, Hesheng Silicon was recently excluded from the Shanghai Stock Exchange 50 Index. On November 24, the Shanghai Stock Exchange issued an announcement on the results of regular adjustments to the Shanghai Stock Exchange's 50th Class Index. According to the announcement, the Shanghai Stock Exchange 50 Index removed 5 samples. Among them, Hesheng Silicon was excluded from the index. According to the Shanghai Stock Exchange 50 Index preparation plan, Hesheng Silicon may be removed due to a decline in market value and low transaction value.
Stock prices have plummeted, and the wealth of the Luoli family has also shrunk sharply. Since this year, Hesheng Silicon has frequently disclosed the controlling shareholders' equity pledges and pledge release announcements. On the same day that the share repurchase was announced, Hesheng Silicon announced that shareholder Luo Yi pledged 3.6 million shares of the company on December 8, accounting for 0.31% of the company's total share capital.
According to the announcement, up to now, Hesheng Group and its co-actors Luo Liguo, Luo Yi, and Luo Yedong have directly held a total of 929 million shares of the company (of which 821 million shares are tradable shares with unlimited sales conditions), accounting for 78.59% of the company's total share capital. After this pledge, out of the company shares directly held by Hesheng Group and its co-actors Luo Liguo, Luo Yi, and Luo Yedong, the cumulative number of shares pledged was 446 million shares, accounting for 47.98% of the total number of shares held by the company and 37.71% of the company's total share capital. According to reports, Luo Yedong and Luo Yi are Luo Liguo's children.