Produced by|Dharma Finance
Industrial Bank's third reduction plan caused Trina Solar's stock price to crash.
On May 29, Trina Solar's share price plunged quickly after the open, and the stock price fell 16.34% to 40.3 yuan on the day, hitting a new low since August 3, 2021.
The reduction of holdings by shareholders of Industrial was an important reason for the sharp decline. On the evening of last Friday (May 26), Trina Solar issued an announcement that the company's shareholder Xingyin Capital plans to reduce its holdings by no more than 5.23% of Trina Solar's total share capital; Xingjing Investment plans to reduce its holdings by no more than 0.42% of Trina Solar's total share capital. Together, the two plan to reduce their holdings by no more than 5.65% of the company's total share capital.
Xingyin Capital is currently the third largest shareholder of Trina Solar, Xingjing Investment is a wholly-owned subsidiary of Xingyin Capital, and IB Capital is a wholly-owned subsidiary of Huafu Securities. According to public information, Huafu Securities is a state-owned financial institution in Fujian Province, and Industrial International Trust, a subsidiary of Industrial Bank, holds 4.35% of the equity of Huafu Securities, and the chairman and president of Huafu Securities have served in Industrial Bank for a long time.
All indications show that the investment of Xingyin Capital and Xingjing Investment in Trina Solar comes from the equity wealth management products of Industrial Bank
Trina Solar is an established photovoltaic company, Trina Solar was listed on the New York Stock Exchange in June 2007 and delisted from the New York Stock Exchange in March 2017. In June 2020, Trina Solar returned to A-shares and landed on the Science and Technology Innovation Board.
IB pointed out in its public publicity materials that "IB has long provided Trina Solar with a full range of financial services covering "equity + debt" and "commercial bank + investment bank", and participated in Trina Solar's US stock delisting, privatization and return to the A-share market. ”
In December 2015, Trina Solar's Board of Directors received a preliminary unconstrained takeover proposal from Trina Solar's Chairman Gao Jifan and Shanghai Xingsheng Equity Investment, a subsidiary of Industrial Bank, to purchase all of Trina Solar's ordinary shares not held by Trina Solar at a price of US$0.232 per ordinary share.
In March 2017, IB Hong Kong provided Trina Solar with privatization transaction funds, and Trina Solar was officially delisted from the US stock market. After the delisting from the US stock market, Trina Solar absorbed new shareholders such as Xingyin Capital and Xingjing Investment, and the company's registered capital also increased from US$420 million to US$1.263 billion.
In July 2017, Trina Solar was transformed from a Sino-foreign joint venture to a domestic-funded enterprise. Among them, the capital contribution of Xingyin Capital was changed to about 1.99 billion yuan, and the capital contribution of Xingjing Investment was changed to about 1.08 billion yuan, and the two held 22.69% and 12.31% respectively. Soon after, the two companies will hold a total of 15.1% of Trina Solar's equity in the listings for sale, resulting in a final transaction profit of 2.325 billion yuan.
In order to promote Trina Solar's smooth return to A-listing, IB was once suspected of "making performance" for Trina Solar's blood transfusion.
According to Trina Solar's prospectus, Trina Solar's photovoltaic power plant sales business segment had revenue of 730 million yuan and 1.67 billion yuan in 2016 and 2017, respectively, but rose sharply to 7.34 billion yuan in 2018. Trina Solar's largest customer in 2018 was Yuansheng Investment, a wholly-owned subsidiary of Industrial Guosen Asset Management Co., Ltd., a subsidiary of Industrial Bank.
At that time, Trina Solar sold 19 photovoltaic power plants to Yuansheng Investment, which also attracted inquiries from the Shanghai Stock Exchange, asking for clarification on whether the transaction was "a real debt of clear shares" and "whether it had commercial substance", which Trina Solar denied.
It is worth noting that after several reversals, these 19 photovoltaic power plants were finally traded to Trina Solar's customers. Trina Solar's listing prospectus shows that Yuansheng Investment still has more than 300 million yuan outstanding at the end of 2019, and the two parties agreed to collect the payment in 2023.
After Trina Solar returned to A's listing, its stock price performance was relatively bright. Since June 2021, Trina Solar has entered a period of strong rise, and in just five months, the stock price has increased fivefold, and the market value once approached 200 billion yuan.
Trina Solar has previously announced that between March 25, 2022 and September 24, 2022, Xingyin Capital reduced its holdings by 30 million shares and Xingjing Investment reduced its holdings by 26.4682 million shares, with a total of 3.413 billion yuan.
Between November 23, 2022 and May 22, 2023, IB Capital reduced its holdings by another 47.71 million shares, and together with Xingjing Investment, the two cashed out a total of about 3.195 billion yuan.
IB cashed out a total of about 6.608 billion yuan through the two reductions of holdings of IB Capital and Xingjing Investment, plus the part of Trina Solar's profit from equity transfer before listing, IB's investment in Trina Solar has been 8.933 billion yuan.
This is the third time that IB has reduced its holdings in Trina Solar. As of the announcement of the reduction plan, IB Capital also holds 233 million shares of Trina Solar, accounting for 10.73% of the company's total share capital. Xingjing Investment holds 9.21 million shares, accounting for 0.42% of the total share capital. This time, Xingjing Investment is a liquidation reduction, and plans to reduce all the shares it holds.
According to Trina Solar's latest share price, IB still holds nearly 10 billion shares worth nearly 10 billion yuan in Trina Solar. Compared with the initial investment of 3.07 billion yuan, IB's total return on investment in Trina Solar is expected to be as high as six times.
However, the continuous reduction of Industrial Bank's holdings coupled with the overall sluggish performance of the photovoltaic industry, since the beginning of this year, Trina Solar's stock price has continued to fall, and since the stock price closed at a record high in August 2022, Trina Solar's share price has been "cut off".
The performance of IB itself has also been affected to a certain extent. According to the first quarterly report of 2023, IB's fee income in the first quarter was 8.825 billion yuan, a sharp decrease of 38.48% over the same period of the previous year.
IB said at the performance exchange meeting that the decline in handling fees and commission income in the first quarter was mainly due to the requirement that the equity assets of existing wealth management products be rectified and retired before 2025 after the implementation of the new asset management regulations. In the past two years, the stock prices of the relevant companies in the underlying assets have performed better, and the cashable income has been relatively large, and there is a certain base reason for the relative lack this year. In addition, due to the generally poor realization of the stock prices of companies such as Trina Solar, the income of cashable old wealth management products in 2023 will depend on the valuation recovery of relevant corporate capital markets and the further realization of equity projects.