On the evening of August 14, iFLYTEK (002230) announced that Liu Qingfeng, chairman of the company, sold 39.9561 million shares of his own company; after this reduction, Liu Qingfeng's shareholding in iFLYTEK decreased from 168 million shares to 128 million shares, and the shareholding ratio was reduced from 7.27% to 5.54%. However, this equity change will not lead to a change in the control of iFLYTEK, and the actual controller of the listed company is still Liu Qingfeng.
In order to stabilize investor sentiment, iFLYTEK quickly held an exchange meeting after the announcement on the same day, emphasizing that Liu Qingfeng's reduction was mainly used to repay debts. iFLYTEK said that Liu Qingfeng is firmly optimistic about the development prospects of the artificial intelligence industry and iFLYTEK, and did not sell 1 cent more shares for personal consumption, and all the borrowed money was invested in the production and operation of iFLYTEK.
Cash out RMB2.35 billion to repay the fixed loan
In the 15 years since its listing in May 2008, Liu Qingfeng has increased his holdings of shares in iFLYTEK four times in order to stabilize the shareholding structure of iFLYTEK and introduce strategic investors, with a cumulative cost of 2.665 billion yuan.
Back in 2013, iFLYTEK introduced strategic investor China Mobile, and in order to maintain actual control, Liu Qingfeng borrowed 300 million yuan to increase his shareholding. In early January 2020, Liu Qingfeng reduced his holdings of iFLYTEK by 9 million shares through block trading, cashing out about 300 million yuan. iFLYTEK said that at that time, Liu Qingfeng's personal arrears of principal and interest repayment period was approaching, in order to avoid the impact on the secondary market, the method of block transaction and paid the corresponding discount price, the reduction amount was all used to repay the arrears.
For Liu Qingfeng's latest reduction of holdings, it is also due to repaying debts.
From 2018 to 2020, iFLYTEK's market value basically fluctuated around 70 billion to 80 billion, and in January 2021, the market value of the listed company stood at a stage high of hundreds of billions. At this time, in order to consolidate the control of iFLYTEK, Liu Qingfeng decided to initiate the additional issuance, and the actual controller subscribed for iFLYTEK fixed increase shares. In July 2021, iFLYTEK completed the private placement, and Liu Qingfeng raised RMB 2.35 billion through pledge financing to participate in the additional offering, and subscribed for a total of 70.4 million shares.
There is a greater risk of additional issuance at high points, and once the stock price falls, in addition to the normal interest repayment, a continuous margin call is required.
After March 2022, due to the continuous downward trend of the macro socio-economic environment and other factors, iFLYTEK's share price fell to 35 yuan on April 26, approaching the liquidation line of the pledge, and with the help of the government and entrepreneur friends, Liu Qingfeng solved the liquidation risk in time by raising funds and supplementing the pledge. In October of the same year, iFLYTEK's share price once fell to a low of 29.64 yuan, with a total floating loss of 440 million yuan based on the fixed issue price of 33.58 yuan per share.
iFLYTEK said that the above debt is due, so Liu Qingfeng needs to reduce his shares to repay the principal of the above loan. According to after-hours block trading data, iFLYTEK had 11 large transactions on August 14, with an average transaction price of 58.82 yuan (8.07% discount from the closing price of the day), and Liu Qingfeng cashed out a total of 2.35 billion yuan this time, almost the same amount as the amount of debt owed, and did not sell more after deducting the principal.
At the exchange meeting, iFLYTEK also said that Liu Qingfeng is still firmly optimistic about the development prospects of the artificial intelligence industry and iFLYTEK, and has led the team to devote himself to the cause of iFLYTEK in the past 24 years. In addition to increasing his holdings in the company with real money, Liu Qingfeng also took the initiative to reduce his salary to encourage employees to start a business.
iFLYTEK further said that in the past ten years, Liu Qingfeng should receive a total salary of 194 million yuan, and he voluntarily lowered the total salary by 153 million yuan, and the actual salary received in the past ten years was 40.66 million yuan, accounting for only 21% of the amount due. In 2022, under the circumstances that iFLYTEK is facing relatively large operating pressure, Liu Qingfeng took the lead in reducing salary, with the average annual salary of the company's management team falling by 22%, and Liu Qingfeng's annual salary falling by 30%, the largest reduction in the senior management team.
It is worth noting that in addition to Chairman Liu Qingfeng's reduction of shareholding, iFLYTEK announced on the evening of July 31 that China Mobile, a shareholder holding 10.70% of the shares, plans to reduce its holdings of iFLYTEK shares by no more than 23.1567 million shares (accounting for 1% of the company's current total share capital) from August 22 to December 31, and this reduction is to recover investment costs according to China Mobile's equity management plan.
Why did you choose to reduce your holdings at this time?
Since the beginning of 2022, Liu Qingfeng has had many opportunities to reduce his holdings at a high price to repay debts, but because the loan has not matured, Liu Qingfeng did not choose to sell stocks to repay the debt in advance.
It is worth mentioning that since 2023, the value of iFLYTEK has gradually been recognized by the capital market, and the stock price once reached 80 yuan in June, which is neither a restricted period for share lock-up nor within the sensitive period of the semi-annual report, but Liu Qingfeng has not reduced his holdings.
So why did you choose to make a large reduction at this time, and you can repay the arrears by reducing your holdings at the beginning of 2022, and why haven't you done this in the past year and a half?
iFLYTEK revealed that in response to the extreme pressure of the United States, listed companies will strategically focus on investment in core technology independent controllability and Xinghuo cognitive large model in 2023, and their short-term business performance in the first half of this year will face greater pressure. If the reduction is carried out within the time available before the release of the half-year report, it may form a material misleading to the market under the condition of information asymmetry, so Liu Qingfeng will not reduce his holdings until the half-year report is fully disclosed.
Second, iFLYTEK will hold the iFLYTEK Spark Model V2.0 Conference on August 15, which will significantly upgrade the code capabilities and multi-modal capabilities that are highly concerned by the industry, and jointly release the Spark all-in-one machine based on domestic computing power with Huawei.
In addition, the Interim Measures for the Management of Generative Artificial Intelligence Services issued by the Cyberspace Administration of China, jointly by the National Development and Reform Commission, the Ministry of Education, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration of Radio, Film and Television, will be officially implemented on August 15, 2023, and the artificial intelligence industry is expected to usher in large-scale growth policy dividends. If Liu Qingfeng reduces his holdings in stocks to repay his debts after the press conference on August 15, the various active marketing activities carried out by iFLYTEK around the iFLYTEK Spark model may be misinterpreted by the market as the purpose of reducing holdings and deliberately speculate on stocks, which will have an unnecessary negative impact on the next stage of industrial development.
Considering the above two factors, Liu Qingfeng chose to reduce his stock holdings to repay debts after the release of the semi-annual report and before the major version upgrade conference of the Spark Cognitive Large Model. At the same time, in order to avoid the impact on the secondary market, Liu Qingfeng adopted the method of large transactions and paid the corresponding discount price.
It should be pointed out that on August 15, iFLYTEK will release the "iFLYTEK Spark Cognitive Big Model V2.0", focusing on the major breakthrough in code capabilities and multimodal capabilities corresponding to this major version upgrade, and the theme of this conference is: "Liberate productivity, release imagination".
At the same time, iFLYTEK Xinghuo will cooperate with Huawei Ascend to launch an independent and controllable Spark all-in-one machine, which can be deployed in the internal network environment of large and medium-sized enterprises and industry customers to ensure data security and personalized requirements in large-model applications. It realizes the integration of training and promotion on domestic independent computing power, efficiently creates a secure and controllable exclusive large model for customers, and has built-in scenario packages such as office, code, knowledge base, and customer service, so as to quickly implement the value of scenarios and help the digital transformation of the industry.
In addition, the further commercial implementation results of the Spark Cognitive Big Model in the fields of education and office - Xinghuo Language Partner 2.0, Spark Teacher Assistant and AI learning machine "AI Creative Drawing Board" and "AI Programming" new functions will also be released simultaneously.
Responsible editor: Zhang Qianye
Proofreader: Yao Yuan
![iFLYTEK has released a blockbuster release![fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)