Three Consecutive Years Of Loss, A Well-Known Textile And Dyeing Board In Fujian Has Been Completely Shut Down.

On the evening of May 10th, the Shenzhen Stock Exchange's official website issued a notice on *ST public and suspension of listing. Then, on the 11 day, *ST Zhonghe also issued a notice to make specific disclosures on the suspension of listing. Since 2015, 2016 and 2017, the net profit of audited net for three consecutive accounting years is negative. May 15th, the company's shares will be suspended, and this is the first suspension of listed shares in 2018.

This company has been on the scene for a while and has been listed as the first stock in Fujian Putian A shares. Why is it now on the verge of delisting?

In the past, the integration of lithium mining business has become a bull stock.

Public information shows that Fujian public and Limited by Share Ltd were registered in 2002, formerly known as Fujian Putian Hua Lun welfare printing and dyeing Co., Ltd. The main business of the company is the development, production and sale of cotton leisure fabrics. It is the first listed company in Putian.

Later, they were not optimistic about textile printing and dyeing. industry In 2012, Zhonghe shares began to start the asset restructuring plan, and integrated lithium mining business to seek a new fulcrum of profits. At the end of July 2012, it announced that it would not buy more than 500 million yuan to acquire Xiamen's silk stone Trading Co., Ltd. not less than 51% of the stock.

On the A share market, the price of ore rose. This announcement also ignited the share price of Zhonghe and its shares. Before that, the unknown stock and shares rose for 8 consecutive trading days, and 7 gains and losses were harvested. With the increase of 115%, they occupied a seat in the first three quarters of the A shares, and became the first evil stock in A city.

In the following 2014 and 2015, the company carried out a dizzying "internal equity integration". During the period, the stock price of Zhonghe shares has been rising. After the stock market crash in 2015, Zhonghe shares recovered rapidly and reached a record high of 31.88 yuan at the same time. In 2016, it also experienced a wave of adjustment, and quickly returned to the peak of 30 yuan. In terms of market value, the market value reached 19 billion 200 million at the peak.

Bad news keeps falling to the worst of A shares.

Through the *ST public and bulletin statistics, from March 18, 2015 to April 26, 2017, the company's real controller Xu and his son carried out a total reduction of 18 stake in the company, a total cash of 1 billion 420 million yuan. Some investors suspect that the controller has a suspicion of running away. Relevant information shows that repeated reduction is compulsory by the court, which is related to the huge debts owed by the two people.

As of August 9, 2016, Xu's father and son had debts of about 1 billion 300 million yuan, including 850 million yuan in principal, resulting in a total interest rate of about 450 million yuan. The 2016 annual report shows that as of December 31, 2016, *ST and overdue loans 380 million yuan, overdue tax 29 million yuan, overdue interest payable 150 million yuan.

In the evening of May 11, 2017, Zhonghe issued a notice that the company's largest shareholder, the actual controller, chairman and CEO Xu Jiancheng was arrested by the Barkam Municipal Public Security Bureau on March 20, 2017 for being suspected of contract fraud. The announcement also indicated that Xu Jian's alleged contract fraud was his personal behavior and had nothing to do with the listed company.

Since then, public and share bad news constantly. In May 2017, due to losses for two consecutive years in 2015 and 2016, the company was taken caps and renamed *ST Zhonghe. In September 2017, *ST Zhonghe also released the news of the Commission's investigation on suspicion of information disclosure. In addition, *ST and board of directors were also paralyzed, and three vice presidents left one after another. In such a tragic situation, the company was applied for bankruptcy reorganization.

Comprehensive restructuring to avoid delisting risks

The latest announcement shows that the company and its subsidiaries will receive financial assistance from strategic investors, thereby replenishing the liquidity of the new energy sector and solving the funding gap of the textile sector staff placement and other expenses. Jin Xin mining will continue to improve the implementation of mining conditions and strive to resume work as soon as possible. The company will strengthen the meticulous management of new energy lithium materials business, and promote and protect the company's return to sustainable development.

As the textile printing and dyeing plate business has been completely shut down, unable to make a positive contribution to the company's profits, the company will continue to seek the overall stripping of inefficient textile assets, reducing costs and expenses.

It is worth mentioning that the creditors have submitted an application for reorganization to *ST and the court has not yet formally decided to accept the reorganization process. *ST said that strategic investors and companies will actively promote the implementation of the reorganization, through restructuring procedures to resolve the debt crisis, to avoid delisting risks.

At present, the strategic investors of Inner Mongolia *ST and the board of directors and shareholders' meeting of the Limited by Share Ltd of the Xingye mining industry have been deliberating and providing financial assistance to *ST Zhonghe and not more than 600 million yuan. The motion for financial assistance was also examined and approved by the board of directors and shareholders' meeting.

Where is the way out for the textile printing and dyeing industry, which is "abandoned" by the public?

The textile printing and dyeing board was once the main business of the public company. By virtue of this forum, it became the leading domestic cotton leisure fabric enterprise, and the famous brands such as seven wolves, nine shepherd, Jin Ba, AI Ge, YISHION, exceptions, and Zara were all their customers. But considering the increasing labor costs, the thinner and thinner links in dyeing and finishing industry and the low bargaining power in the industry, the company began to shift the battlefield to the lithium battery industry chain.

In March 17th of this year, *ST and the public announced that nearly 1 billion yuan would be spanferred to the textile printing and dyeing sector. However, because the company failed to collect eligible assignees during the three spanfer of the textile sector assets, the company will terminate the listing of the underlying assets and find another suitable counterparty.

So many people are so dissatisfied with the textile printing and dyeing board. Is it really the textile printing and dyeing industry that has become the sunset? industry Is there no profit?

We take printing and dyeing as an example. In fact, the profit rate of China's printing and dyeing industry is relatively low at present, only about 5%. The leading enterprises in China share only 4 yuan per square meter, while the import dye up to 2 dollars per square meter. There is still much room for development of high value-added products.

If the public and its own strength will unswervingly strengthen the textile printing and dyeing industry, make full efforts to spanform and upgrade, instead of easily changing the company strategy, spanferring the target, and carrying out complex internal equity integration, what will the outcome be?