Interpreting The End Of Year Shell Preservation Of GEM

Because of macro Economics In the downturn, the GEM's loss area is expanding year by year: in 2011, only Dangsheng Technology (300073. SZ) lost money, and in 2012, the number of companies that lost money increased to 13, including 5 companies that lost money again in the third quarter of 2013. They are Wanfu Biotech (300268. SZ), Tianlong Optoelectronics (300029. SZ), Baode Shares (300023. SZ), Jin Tongling (300091. SZ), and Jianrui Fire Protection (300116. SZ).

"There should be delisted companies on the GEM in the next two or three years." A person from the securities department of the GEM company said that listed companies have financial adjustment techniques, and local governments will also help, but for the GEM companies that continue to lose money, how to restore their own hematopoietic capacity is the key.

Under the background that the regulatory authorities do not allow backdoor GEM companies, the impulse of GEM companies to protect their shells has led to the emergence of mergers and acquisitions, a "curve to save the country".

　 Raised and cast into a double-edged sword

The 21st Century Business Herald reporter found that GEM companies that continue to lose money are accompanied by raised investment projects that do not meet expectations, which is also the cause of the company's loss and blood loss.

"Funded projects are like a double-edged sword." A GEM board secretary said that the company can transform and upgrade if it does a good job of funded projects, but with the gradual completion of funded projects, the company will have less and less funds raised in its accounts, which will reduce the company's interest income. Once funded projects are completed, construction in progress will be transferred to fixed assets, which will generate depreciation, Once the profits of the project invested by raised funds cannot cover depreciation, losses will follow.

According to the statistics of the 21st Century Business Herald, when Wanfu Biotech was IPO, none of the four fund-raising projects reached the expected benefits; Tianlong Optoelectronics' 4 projects with raised funds and 1 project with over raised funds failed to achieve the expected benefits; Only the "implementation of ERP information management project" of one fund-raising project and three over fund-raising projects of Baode Shares achieved the expected benefits, while three of the four fund-raising projects of Jinlingtong did not achieve the expected benefits.

The only exception is Jianrui Fire. Its two projects were completed on December 31, 2013 and December 31, 2014, respectively. At present, it is impossible to judge whether the expected benefits can be achieved.

Baode also experienced the situation that the project invested with raised funds did not generate revenue, but instead dragged down the listed companies - Baode went public on October 30, 2009, raising 265 million yuan, of which 160 million yuan was invested in the "production base of integrated electric control equipment for oil drilling and production", but the project was delayed several times, and could not produce the initial estimated total annual profit of 126 million yuan, which corresponds to that, Since 2012, the accumulated loss of the project of "setting up Xi'an Baode Electric Co., Ltd." invested with over raised funds has been close to 20 million yuan.

Accelerating the momentum of M&A

"If only by Finance If the method or government subsidy is used to achieve shell preservation, it is only to treat the symptoms rather than the root causes. ”A GEM board secretary said that if the main business cannot be boosted, the hematopoietic capacity of listed companies can be restored through mergers and acquisitions.

Tianlong Optoelectronics is a deep downturn in the photovoltaic industry, and its main business has been struggling to turn around losses.

On December 25, 2010, Tianlong Optoelectronics listed and raised 878 million yuan in cash, but suffered a huge loss of 511 million yuan in 2012, and a loss of 34.52 million yuan in the first three quarters of 2013, which nearly dried up the cash on its books. The financial report shows that the monetary capital of Tianlong Optoelectronics was only 86.95 million yuan at the end of September 2013, down 47.56% from 164 million yuan at the beginning of the year.

"The company's current capital The situation is really not very ideal. ”Lu Song, the Secretary of Tianlong Optoelectronics, admitted.

In the eyes of some people in the capital circle, M&A can make the acquiree promise performance, which means that if the M&A is successful, the profit pressure of listed companies will be reduced a lot, and there will be no risk of shell protection in two or three years.

Among the five GEM companies that have suffered continuous losses, Jianrui Fire was suspended on November 4 for major asset restructuring.

The 21st Century Business Herald reporter has learned that Jianrui Fire is planning to do mergers and acquisitions in the same industry, which can not only enhance the company's performance, but also make itself stand out in the battle of fire fighting as soon as possible.

"GEM listed companies have a relatively high P/E ratio, and sometimes the essence of M&A of some assets with low P/E ratio is to spend money to buy profits." The above listed company's board secretary said that although the regulatory authorities do not allow backdoor GEM companies, if M&A is adopted, the acquiree can become the second largest shareholder. At this time, if the major shareholders reduce their holdings, In theory, the acquiree has the opportunity to become the new owner of the listed company.