Stock speculation overturned, YTO Express "brother-in-law" pits his son and pits his brother-in-law?

VP mistakes again?

Author | Yu Qi

Editor丨Wu Lijuan

Source | Bronco Finance

Yu Huijiao, a well-known Zhejiang businessman and chairman of the board of directors of YTO Express (600233.SH), was recently cheated by his relatives.

On November 23, YTO Express announced that Zhang Yizhong, director and vice president of the company, received the "Notice of Case Filing" issued by the China Securities Regulatory Commission (CSRC) because he was suspected of short-term trading of his own stocks.

And Zhang Yizhong's other identity is the younger brother of Yu Huijiao's wife Zhang Xiaojuan, that is, the brother-in-law of the company's boss.

On October 24 this year, the "2023 Hurun Report" was released, and Yu Huijiao ranked 202nd with a value of 25.5 billion yuan. And this is also the 10th consecutive year that Yu Huijiao has landed on the Hurun rich list.

In the face of his brother-in-law's strong ability to create wealth, Zhang Yizhong's methods are not so clever.

After "pitting" his son, he will "pit" his brother-in-law?

Zhang Yizhong's choice of wealth creation method is short-term trading of his own stocks.

The matter can be traced back to the period from June 15, 2022 to June 15, 2023, Zhang Yizhong bought and sold the company's shares through the Shanghai Stock Exchange trading system in a centralized bidding transaction, buying a total of 563,200 shares of the company's shares with a total transaction amount of 10.5854 million yuan, selling 563,200 shares of the company's shares with a total transaction amount of 10.8401 million yuan, and receiving after-tax dividends of 7,645.5 yuan during the period, deducting transaction commissions. The cumulative income after stamp duty and other taxes is 244,900 yuan.

However, after the incident, Zhang Yizhong threw the "black cauldron" to his son Zhang Shijie as soon as possible. YTO Express also issued an announcement on August 5 on short-term trading and apologies for the directors' immediate family members.

In this announcement, YTO Express stated that the above-mentioned transaction was an investment decision and investment behavior made independently by Zhang Shijie based on the information that has been disclosed in the securities market and based on his personal judgment, and Zhang Yizhong was not consulted during the transaction, nor was he informed of the above-mentioned trading behavior, and there was no situation of obtaining or using inside information to seek benefits.

YTO Express also said that Zhang Shijie has now handed over the proceeds of the above-mentioned transaction to the company, and promised not to buy the company's shares within six months from the date of the last sale of the company's shares.

After deeply realizing his mistake, Zhang Shijie also apologized to YTO Express and the majority of investors, saying that this was caused by his lack of full understanding of the relevant regulatory provisions of short-term trading, and that he would conscientiously study and consciously abide by the "Securities Law" and other relevant laws and regulations in the future to standardize his securities trading behavior.

However, this argument that "juvenile ignorance leads to mistakes" was quickly debunked by the CSRC. In the announcement of the receipt of the "Notice of Case Filing", YTO Express admitted that the securities account under the name of Mr. Zhang Shijie was controlled by Mr. Zhang Yizhong, and the transactions were actually operated by Mr. Zhang Yizhong, and the company corrected the statement on the subject of the transaction in the previous announcement. The company apologizes for the inconvenience caused to investors and asks for the understanding of investors.

YTO Express said that the case is an investigation of Zhang Yizhong's personal and will not have a significant impact on the company's production, operation and management activities, and the company's current operation management and business activities are normal.

Xu Xu of Beijing Gridsum Law Firm said that the short-term trading classification system stipulated in the Securities Law of the mainland has a similar legislative purpose to the regulation of insider trading, that is, to prevent insiders from taking advantage of information to engage in unfair securities trading behaviors. Compared with the actual illegal acts that occur in the regulation of insider trading, the regulation of short-term trading focuses more on the prevention of possible insider trading behaviors, that is, the focus of regulation is shifted to the front end of insider trading.

However, from "short-term trading of directors' immediate family members" to "short-term trading of directors", I am afraid that it will not be solved by just apologizing.

Xia Hailong, a lawyer at Shanghai Shenlun Law Firm, pointed out that according to the relevant provisions of the Securities Law, the regulator may order insider traders to dispose of illegally obtained securities in accordance with the law, confiscate illegal gains, and impose a fine of not less than one time but not more than five times the illegal gains or the equivalent value of the illegally traded securities. where a crime is constituted, criminal responsibility is pursued in accordance with law. Whether a company is liable depends on whether it is also involved in insider trading.

Lawyer Yang Zhaoquan, a partner at Weinuo Law Firm, said that short-term trading of one's own stocks is generally a personal act and does not involve the liability of the company or other directors, supervisors and senior executives. If the party conceals his own operation to let his son top the bag, and the company does not know about it, the company does not bear the responsibility for the wrong information disclosure. His legal liability should be aggravated on the basis of the original short-term trading. If the relevant personnel of the company participated in the conspiracy of the top bag, then the company is guilty of intentional false disclosure and should bear the legal liability for misrepresentation under the securities law.

Family-owned businesses are driving the capital markets

Zhang Yizhong's resume found that he has considerable experience in the express logistics industry and the capital market, and before joining YTO Express, he also served as the general manager of Shentong Express (002468.SZ) Ningbo Branch from August 1999 to 2007.

Like most express delivery companies, YTO Express is a typical family business that started in Tonglu, Zhejiang. In this "hometown of China's private express delivery", it has given birth to "three links and one reach", which accounts for half of the express delivery industry in the mainland.

In 2000, at the suggestion of his wife Zhang Xiaojuan, Yu Huijiao, who owed 1.82 million yuan for dry decoration, decided to change careers and start a business, so he used the borrowed 50,000 yuan to establish YTO Express.

In 2005, YTO Express became the first domestic express delivery company to sign a contract with Taobao, and in the following three years, it grew into one of the largest domestic express delivery companies in one fell swoop.

At the time when the company was booming, Yu Huijiao's brother-in-law Zhang Yizhong resigned from Shentong Express to join YTO Express, and successively served as the company's vice president and director from 2008 to June 2017, and has served as the company's director and vice president since October 2016.

In 2016, YTO Express successfully backdoor Dayang Chuangshi, becoming the first express delivery company in China to land on the A-share market.

At present, Yu Huijiao and Zhang Xiaojuan directly hold 2.92% and 2.15% of the company's shares respectively, and indirectly hold 30.3% of the company's shares through Shanghai YTO Jiaolong Investment and Development (Group) Co., Ltd., with a total of 35.37% of the shares of YTO Express. As a relative of the boss, Zhang Yizhong naturally also got the company's shares. Zhang Yizhong indirectly holds 0.37% of the equity of YTO Express through Shanghai Yuanyue Investment Management Partnership (Limited Partnership).

But the brother-in-law, who is over 50 years old, did not let his brother-in-law Yu Huijiao worry, he once bought 10,000 shares of the company's shares on August 25, 2020 due to misoperation of the securities account, and the company disclosed its semi-annual report three days later. Since its purchase of shares was in a sensitive period, the transaction violated the regulations that directors and senior management are not allowed to increase their holdings of the company's shares during the sensitive period.

At that time, Zhang Yizhong said that he was deeply aware of the seriousness of this transaction and sincerely apologized to the company and investors for this transaction. However, in the past two years, he has knowingly committed crimes.

Third-quarter results were under pressure

With the joint efforts of the family, YTO Express's revenue has increased sharply since its listing, achieving revenue of 53.546 billion yuan in 2022, a year-on-year increase of 18.58%, and a net profit of 3.92 billion yuan, a year-on-year increase of 86.34%.

The share price of YTO Express has also continued to rise with the improvement of performance, especially during Zhang Yizhong's short-term trading from June 15, 2022 to June 15, 2023, the company's stock price reached a maximum of 22.5 yuan per share.

However, in 2023, the growth rate of YTO Express's performance will slow down, and its revenue will decrease by 28.3% in the first half of the year. In the third quarter, the company increased revenue but did not increase profits, with a total operating income of 40.759 billion yuan, an increase of 4.98% year-on-year, and a net profit attributable to the parent company of 2.659 billion yuan, a year-on-year decrease of 4.06%.

Looking at other indicators, in the first three quarters, the gross profit margin of YTO Express was 10.49%, down 8.46% year-on-year, and the net profit margin was 6.61%, down 8.7% year-on-year.

China Merchants Securities believes that this is due to the fierce competition in the off-season of the industry in the third quarter and the short-term pressure on performance.

Now the brother-in-law is thinking hard about the company's performance growth, but his brother-in-law Zhang Yizhong "dropped the chain" and was filed for trading his own stocks.

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