The performance skyrocketed, but the stock price fell to the limit, and 10 times the big bull stocks were crazy cashed out!
The stock market has indeed reached a low level at this position, but some individual stocks continue to fall sharply. In the first two years, when it rose, the faster the performance of individual stocks grew, the higher the stock price rose, and it did not look at whether the performance matched the stock price.
The performance is expected to increase by more than 4 times, and the stock price has crashed and stopped
A domestic private equity fund manager once said that the biggest risk of investing in growth stocks is not growing and pseudo-growing. However, for some individual stocks at present, the explosive growth of the results will fall sharply after the announcement.
Yesterday evening, Quartz Co., Ltd. (603688.sh), a super bull stock in the first two years, released its 2023 performance forecast, which is expected to achieve a net profit attributable to the parent company of 4.75 billion to 5.33 billion, a year-on-year increase of 351.44%-406.56%, and is expected to achieve a net profit of 4.72 billion to 5.3 billion, a year-on-year increase of 374.47%-432.77%.
(Screenshot of quartz stock performance forecast)
Quartz said in the performance forecast that the reason for the expected increase in performance is that it will achieve rapid growth in operating performance in 2023 due to the rapid growth of demand in downstream semiconductor, photovoltaic and other industries. The market demand for quartz materials in the photovoltaic field has increased significantly year-on-year, and the production and sales are booming, and the quartz materials for semiconductor have benefited from the company's continuous certification by international semiconductor equipment manufacturers in recent years and continuous R&D investment for many years, and the market has also increased rapidly.
Its main downstream photovoltaic and semiconductor industries are indeed industries with a relatively high degree of prosperity in recent years, and this performance should be said to be beyond doubt.
However, the reaction of the A-share secondary market has also been quite explosive. As soon as the market opened today, the share price of quartz shares opened directly lower by more than 8%, and it was pressed on the falling limit board in less than ten minutes after opening, and the intraday falling limit board sealed more than 18,000 hands, and the sealed order capital exceeded 140 million.
(Screenshot of quartz shares on January 24)
I don't understand, why is this happening? Isn't it true that the higher the performance growth rate, the better?
However, there is one thing that should be remembered when making an investment, the market is always right!
Accounting errors were warned, and buybacks could not save the stock price
Quartz Co., Ltd. is mainly engaged in the production, research and development and sales of quartz products, the main products include quartz sand, quartz tube rod, quartz crucible, belongs to the non-metallic material industry, it produces quartz tube rod for many years in the industry.
In the A-share business similar to it, the only company should be Philip, which is one of the three major international semiconductor original equipment certified quartz material companies. But in terms of scale, Philip is smaller, Philip will have a revenue of 1.719 billion and a net profit of 489 million in 2022, and Quartz will have a revenue of 2.004 billion and a net profit of 1.052 billion in 2022.
Since Quartz shares landed on A-shares on October 31, 2014, its performance has continued to maintain rapid growth, with a revenue of only 356 million and a net profit of only 64.6826 million in the year of listing, and a revenue of 2.004 billion and a net profit of 1.052 billion in 2022, with a compound annual growth rate of more than 25% and 40% respectively, and a compound annual growth rate of more than 63% calculated according to the upper limit of 5.33 billion in 2023!
(Source: Straight Flush website)
However, when things go wrong, there must be demons.
At the beginning of November 2023, Quartz shares and related responsible persons were punished by the Jiangsu Securities Regulatory Bureau with a warning letter because Quartz shares failed to review and disclose related party transactions and errors in the disclosure of annual reports in a timely manner, which violated the relevant provisions of the "Measures for the Administration of Information Disclosure of Listed Companies".
Specifically, in 2022, Quartz Co., Ltd. did not perform the review procedures and disclose the related party transactions of 11.6258 million yuan with Wuhan Xinyoutai and the related party transactions of 8,000 yuan with Donghai Shangri. There were errors in the relevant disclosures of the annual report, which led to an inflated net profit of 253,300 yuan, a false decrease of 4.278 million yuan in sales expenses, a false decrease of 9.7995 million yuan in manufacturing expenses, and an inflated increase of 14.0786 million yuan in management expenses in 2022.
(Source: Sina Finance)
After being taken warning regulatory measures, the actual controller of quartz shares quickly proposed on November 16, 2023 to use the company's own funds to repurchase the company's shares of no less than 100 million yuan and no more than 200 million yuan through centralized bidding transactions in the secondary market.
(Screenshot of quartz stock announcement)
However, the slogan-style shouting repurchase not only did not stabilize the stock price, but stimulated the company's stock price to accelerate its decline, until December 15, 2023, when Quartz shares officially released the repurchase plan, the company's stock price stopped falling, during which the stock price fell by more than 25%, and the market value of about 7 billion fell!
(Screenshot of quartz stock price trend)
After the release of the buyback plan on December 15, 2023, the share price of quartz shares rebounded by more than 30% in a month, but the pullback in recent days and today's drop limit have eaten up most of the rebound results.
In 4 years, the company reduced its holdings and cashed out 1.1 billion, and the actual controller accounted for half
In fact, today's drop limit is really not worth mentioning for the share price of quartz shares in the past year or so, because today's fall is only from yesterday's 86.88 yuan to 78.19 yuan, and the share price of quartz shares has fallen from 165.59 yuan to 69.88 yuan in the past year. The halving must have been cut in half, and the market value has also fallen from a high of 56.749 billion to 28.25 billion today, evaporating 28.499 billion!
(Screenshot of quartz stock price trend)
It can be seen from the trend chart of quartz shares that the period from May 2021 to August 2022 is the main range of its stock price outbreak, during which the stock price soared from about 15 yuan all the way to the highest 165.59 yuan, an increase of more than 10 times, this increase is obviously too much in the future, and its static price-earnings ratio reached nearly 200 times at the highest!
However, the performance of quartz shares in the past two years has indeed been relatively fierce, with a year-on-year increase of 274.48% in 2022, a year-on-year increase of 351.44%-406.56% in 2023, and a cumulative increase of 15.9 times -17.9 times in two years.
However, it should be noted that when the stock price of quartz shares soared and the valuation soared, the company's major shareholders, including the actual controller, were also frequently reducing their holdings and cashing out, which naturally accelerated the rapid return of the valuation of quartz shares.
According to the data of Flush i Qiancai, since its listing, the shareholders of quartz shares have reduced their holdings and cashed out more than 1.149 billion, of which more than 1.082 billion were reduced and cashed out in the four years from 2020 to 2023, and more than 545 million of them were reduced and cashed out by the actual controller Chen Shibin, and his brother-in-law Shao Peng (the younger brother of Chen Shibin's wife Shao Jing) reduced his holdings and cashed out more than 97.86 million, and the first, second and third employee stock ownership plans cashed out more than 390 million.
(Screenshot of quartz stock announcement)
Interestingly, Chen Shibin, as the actual controller of quartz shares, has completed the third phase of the employee stock ownership plan that the company has completed, and the second and third phases have the name of the actual controller, Chen Shibin. This also means that in addition to the 545 million that Chen Shibin cashed out, he also had the funds to reduce his holdings and cash out through the employee stock ownership plan.
(Screenshot of quartz stock announcement)
On the whole, the performance of quartz shares continued to grow rapidly, but the senior shareholders, including the actual controller, were reducing their holdings and cashing out a large number of them, and the company was issued a warning letter due to accounting errors and other reasons. Coupled with the market's response to the company's high performance growth with a falling limit, it seems to increase the possibility that the authenticity of the company's financial data is unreliable.