*St Star Falling Back: Dark Finance And The Secret Of Toxic Assets Transfer

The sudden financial bath shock wave, instantly let * ST star (300256. SZ) exposed a lot of holes in the tattered phase.

According to market data statistics, in the 11 trading days from August 16 to 30, * ST star's share price plummeted by 59.42%, and its market value was only 2.27 billion yuan. The downward adjustment of consolidated net profit of the company in 2020 is more than 2.545 billion yuan due to an accounting error correction, which is exactly the root cause of the collapse of * ST star.

In view of the stock price changes in the market, * ST star has previously issued an announcement saying that it has been approved by the court for pre reorganization, the company's production and operation are normal, and the current situation is favorable, which can increase the possibility of the court approving the company to enter into the formal reorganization procedure.

"Last year * ST star applied for a loan from a financial institution, but after verification, the financial institution found that * ST star concealed many potential problems, and finally refused to lend." An informed person disclosed to the reporter of the 21st century economic report on August 30.

In fact, today's messy * ST stars have laid "mines" in the red and purple highlights.

St star's large amount of interest bearing liabilities also has the problem of large deposits and large loans-- Visual China

The explosion of debt has hidden secrets

*St Star stock price avalanche, resulting in the second largest shareholder Pingxiang Zhongzhou Xin'an pledge stock passive reduction and was applied for sale freeze.

According to the announcement, on August 27, Societe Generale Securities disposed of 6.465 million shares held by Zhongzhou Xin'an, accounting for 0.67% of * ST Xingxing, by means of centralized bidding trading, because of the default clause of triggering stock pledge type repurchase transaction business. The total number of shares to be disposed of by industrial securities is no more than 47.8968 million.

Zhongzhou Xin'an shares were transferred from ye Xianyu, the original controller of * ST Xingxing.

After Pingxiang fan tike, affiliated to Pingxiang Economic Development Zone Management Committee, transferred 144 million shares of 14.9% of * ST star held by Ye Xianyu, Xingxing group, Wang Xianyu, etc., ye Xianyu transferred 76.6349 million shares of 8% of * ST Xingxing to Zhongzhou Xin'an on August 17, 2020.

Different from fan tike's 3.39 yuan / share, Zhongzhou Xin'an's transfer price has been raised to 6.21 yuan / share.

As of August 30, the closing price of * ST star was 2.37 yuan / share. The shares held by fan tike and Zhongzhou Xin'an were 30.09% and 61.84% respectively.

At the beginning of listing, ye Xianyu and his controlled Star Group held 24.75% and 4.79% of the shares of * ST star respectively. However, according to the semi annual report of 2021, the shareholding proportion of Ye Xianyu and Xingxing group is only 1.27% and 2.63%.

Ye Xianyu not only realized cash by wantonly reducing his holdings of * ST stars, but also had a large amount of loans under his control.

"Through comparison, we can see that * ST star's loan has increased rapidly since 2014, and by the end of 2018, before the Management Committee of Pingxiang economic and Technological Development Zone, has increased by more than 2 billion yuan. What has been done with these money should be re checked." A CPA pointed out to the 21st century economic reporter.

According to public data, the short-term and long-term loans of * ST star were 220 million yuan and 0 yuan in 2013, 429 million yuan and 35 million yuan in 2014, and increased to 2.508 billion yuan and 489 million yuan in 2018.

"* ST star's loan increases, and equipment purchase expenses also increase significantly. It can be reasonably suspected that there is a link." Said the certified public accountant.

According to the data, from 2016 to 2020, the equipment investment of * ST star is 528 million yuan, 464 million yuan, 497 million yuan, 411 million yuan and 514 million yuan respectively.

Correspondingly, the contribution of * ST star in purchasing a large number of equipment is difficult to reflect, and the revenue has even declined.

*According to the historical announcement of St star, the production capacity of touch screen in 2017 and the end of September 2020 will be 45 million and 37.5 million respectively. Over the same period, the production capacity of precision structural parts was 500 million and 525 million respectively.

The total operating revenue of * ST star was 5.647 billion yuan in 2017 and 5.131 billion yuan in 2020 after adjustment.

*St star's debt size is even more astonishing.

According to the annual report, the total interest bearing liabilities of * ST star in 2020 will be 3.955 billion yuan, including 3.544 billion yuan of interest bearing liabilities due within one year.

*St star's large amount of interest bearing liabilities also has the problem of large deposits and large loans.

In 2020, the balance of * ST star's monetary funds at the end of the period is 684 million yuan, but the total amount of funds restricted by mortgage, pledge or freezing is 533 million yuan.

Toxic M & A and investment "black hole"

Relying on loans to whitewash * ST star, there are a large number of toxic assets in merger and acquisition projects.

According to the annual report of * ST star in 2020, the current net profits of its wholly-owned subsidiaries star touch and Shenzhen precision reached 65.8575 million yuan and 57.475 million yuan respectively, which were the most important profit sources.

According to the historical announcement, * ST star acquired 100% equity of star touch and Shenzhen precision, with transaction consideration of 839 million yuan and 1.4 billion yuan respectively.

Prior to that, * ST star's goodwill impairment test results showed that from 2021 to 2025, star's touch forecast period profit was 111.5941 million yuan to 156.634 million yuan, and Shenzhen precision was from 173.6414 million yuan to 239.9136 million yuan, claiming that no provision for impairment of goodwill was required.

However, the semi annual report of 2021 shows that star touch and Shenzhen precision lost 901 million yuan and 719 million yuan respectively in the first half of this year.

Therefore, * ST star decided to make up 876 million yuan of goodwill impairment reserves for star touch and Shenzhen precision in 2020. The book value of goodwill accounted for 44.78% of the net assets of * ST star in that year.

However, Dongguan precision, which was acquired by * ST star in September 2019, dropped sharply in the same month and gradually shrank. It began to stop production in August 2020 and was in an insolvent state.

In the * ST star periodic report, Dongguan precision lost 36.8554 million yuan, 162.3991 million yuan and 25.7072 million yuan respectively from 2019 to the first half of 2021.

*St star investment is more than that.

In August 2020, * ST star decided to increase capital to 1234 of Shenzhen city with 880 million yuan, obtaining 26.67% equity of the latter.

However, according to the 2020 annual report, * ST star has prepaid RMB 550 million for equity investment to Shenzhen 1234, and the company has not obtained the shareholders' equity of the invested company due to the fact that it has not yet completed the matters stipulated in the investment agreement. So far, the matter is still pending.

In May 2017, * ST star and its related person Mao Xiaolin jointly invested in Tsinghua nengbo with its own capital of 10 million yuan and obtained 10% equity. By 2020, * ST star will transfer its shares at a price of 125000 yuan, which will cause a loss of 9.875 million yuan.

The 21st century economic reporter has noticed that there are still many * ST stars playing the role of Pan Xia. Over the years, some of them have been included in the company, such as Shenzhen Lianmao, Zhuhai Guangbao mobile, Guangzhou Guangbao mobile, Shenzhen Guangbao mobile, etc.

However, the profitability of these companies is worrying. According to the previous announcement, the three Guangbao companies lost 80.4931 million yuan in the first quarter of 2019, and * ST star is expected to be unable to turn losses into profits in the short term.

"Now the problem of * ST star has been torn open, and its previous large number of mergers and acquisitions and investments should be re sorted out, from which the track of accounting treatment, capital operation and the whereabouts of money may be found." A securities trader said in an interview with the reporter of the 21st century economic report.

*St star is not only toxic to M & A investment, but also misleads investors.

In July 2015, Wang Xianyu, then chairman of * ST star, announced in an exclusive interview with the media that the company expected to achieve a net profit of more than 830 million yuan by 2019, with a market value of 50 billion yuan.

In fact, by the end of 2019, the net profit of * ST star is only 174 million yuan, and the market value is 5.786 billion yuan.

Today, although * ST star has reached the stage of pre restructuring of its insolvent assets, its early senior executives and shareholders, including Wang Xianyu, have already made a lot of profits from it.