ST Chengxing (600078), a “big bull stock” that has increased more than three times in half a year, suddenly announced on the evening of November 9 that it was filed for bankruptcy by its creditors Regroup. For a while, the comments were mixed, “The more you sing bearish, the higher the price rises”, “Bankruptcy and reorganization is better than bankruptcy and liquidation”, “Those ten-fold stocks have come this way, continue to be optimistic”…compared to those stocks that fall by the limit as soon as there is bad news. As for stocks, *ST Chengxing quickly rose to the daily limit again at the opening of the market recently, closing at 8.05 yuan/share after hitting the daily limit for two consecutive days this week. After the market closed, *ST Chengxing issued an announcement on abnormal stock trading fluctuations and reminded investors that there is still significant uncertainty as to whether the company will enter bankruptcy and reorganization procedures.
When it comes to the listed company Chengxing Shares, we have to mention Chengxing Group, Chengxing Shares as The listed companies of Chengxing Group are probably not only in Jiangyin, but also in Jiangsu and even across the country. Many people have heard of this former “chemical giant”. Let us understand the “year” and “year” of this company. strength”.
Chengxing Group’s official website states that the company was founded in 1984, with sales revenue ranging from dozens to Tens of millions to tens of billions, ranging from a small chemical factory to the leading “chemical industry” leader in the country. Its products involve fine phosphorus chemicals, fine coal chemicals, petrochemicals (PET, PTA), electronic chemicals, liquid chemical warehousing and logistics, international trade, financial investment, modern service industry and other fields. It has more than 50 wholly-owned and controlled subsidiaries. The company currently has total assets of over 50 billion yuan and more than 10,000 employees. Listed on the Shanghai Stock Exchange in June 1997, it is a key enterprise in the production and sales of fine phosphorus chemicals in China and has been among the top 500 Chinese companies for 18 consecutive years. In 2019, on the occasion of the 35th anniversary of the establishment of Chengxing Group, the group’s revenue exceeded 100 billion yuan for the first time, becoming the third 100 billion enterprise in Wuxi. In 2020, it ranked 9th on the list of the top 100 private enterprises in Jiangsu with a revenue of more than 108.5 billion. Among them, the petrochemical industry currently has an annual output of 1.2 million tons of bottle-grade polyester chips (PET) and an annual output of 3 million tons of purified terephthalic acid (PTA).
*ST Chengxing applied for bankruptcy reorganization
On the evening of November 9, *ST Chengxing issued an announcement stating that, The company’s creditor, Jiangyin Construction and Decoration Products Factory, has applied to the Wuxi Intermediate People’s Court for bankruptcy reorganization of the company on the grounds that the company cannot pay off its due debts and its assets are insufficient to pay off all debts. According to regulations, if the court accepts the reorganization application, the company will need to formulate a reorganization plan, and creditors will be repaid accordingly; if the reorganization plan is not approved or cannot be implemented, the court will declare the company bankrupt and the company’s stocks will be terminated from listing. risk. The announcement also stated that as of now, the company has not received the court’s ruling on the applicant’s application for company reorganization. There is still significant uncertainty as to whether the applicant’s application can be accepted by the court and whether the company will enter the bankruptcy reorganization process.
Reorganization will help optimize resource allocation and provide a good opportunity to resolve the company’s current crises and risks. *ST Chengxing also stated that regardless of whether the company enters the reorganization process, the company will maintain the stability of daily production and operations on the current basis.
The stock price has increased by more than 300% in half a year
Benefiting from the increase in the price of yellow phosphorus, *ST Chengxing’s recent stock price has increased astonishingly. Data shows that the company’s stock price has exceeded 26 daily limits in the past three months, and the stock price has doubled in three months. This week, three consecutive trading days closed at the daily limit. In the early trading on the 10th, *ST Chengxing quickly rose to the daily limit, closing at 8.05 yuan per share, up 4.95%, with a total market value of 5.334 billion yuan. The stock started to rise on May 21 this year, with an increase of more than 300% in half a year.
In terms of performance, *ST Chengxing’s performance improved significantly in the first three quarters of this year, achieving operating income of 2.491 billion yuan, a year-on-year increase of 10.19%; net profit increased, with a net profit of 92.9062 million yuan, A year-on-year increase of 1525.32%. Among them, the net profit attributable to shareholders of listed companies in the third quarter was 105 million yuan, a year-on-year increase of 8740.50%. Regarding the increase in performance, *ST Chengxing said that the increase in sales price of yellow phosphorus led to an increase in sales gross profit margin.
However, some organizations have reminded that despite the sharp increase in product prices, there are still risks in *ST Chengxing’s operations. According to the third quarter report, the company is already insolvent, with total liabilities of 5.267 billion yuan and equity attributable to the parent company of -383 million yuan. Current assets on the books are 1.639 billion yuan, and short-term borrowings are 3.715 billion yuan. In addition, the cumulative pledged number of *ST Chengxing shares held by the controlling shareholder Chengxing Group is 171 million shares, accounting for 100% of the company’s shares held by it, and has been frozen.
Moreover, negative news about *ST has been constant recently. Just one day before the announcement that creditors applied for bankruptcy reorganization, that is, on November 8, *ST Chengxing announced that as of now, There were 15 cases involving litigation (arbitration), with a total amount of 2.266 billion yuan involved, of which 2.143 billion yuan was involved in major lawsuits and lawsuits (arbitration).The amount of � is 123 million yuan.
Judging from the specific causes of litigation, they are all financial loan contract disputes. At the same time, the company’s equity holdings in 17 companies including Yunnan Mile Phosphorus Electrical Chemical Co., Ltd. were applied for freezing. In addition, in September, *ST Chengxing frequently received regulatory inquiry letters, requiring supplementary disclosure of the measures taken and planned to be taken by all directors, supervisors and senior management of the company to recover relevant amounts so far, as well as the current specific progress; the company’s first half of 2021 Reasonableness of not accruing interest receivable; whether the measures planned by the controlling shareholder in the early stage are feasible; self-examination to see if there are other undisclosed capital occupations, illegal guarantees, and assets being frozen, sealed (detained), etc.
It is worth noting that the company’s stocks have been issued a delisting risk warning. According to relevant regulations of the Shanghai Stock Exchange, if the company’s audited net assets are negative at the end of 2021 or the audit institution is unable to issue a standard unqualified audit report, the company’s shares will be terminated from listing.
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