Source: Company E
Zhongnan Construction (000961), which has just ushered in the "white knight", is about to wear a hat.
Zhongnan Construction (000961) announced on the evening of April 22 that the company's shares were suspended for one day from the opening of the market on April 23, and resumed trading from the opening of the market on April 24, and was implemented "other risk warnings", and the stock abbreviation was changed from "Zhongnan Construction" to "ST Zhongnan", and the daily rise and fall of stock trading was limited to 5%.
At the same time, a few days ago, some media released an article "Just "Saved Wang Jianlin" PAG Investment Group Has Made Another Big Move", saying that on the afternoon of April 20, led by the Haimen District Government of Nantong City, the company's controlling shareholder Zhongnan Urban Construction and Asia's famous private equity investment company PAG Investment Group (PAG) and Jiangsu Assets and other institutions negotiated debt resolution, equity transactions and other cooperation, Zhongnan Construction also confirmed the above news to the media. On April 22, the Shenzhen Stock Exchange issued a letter of concern to Zhongnan Construction, requiring the company to explain the authenticity of the matters mentioned in the above article.
Wear a hat after the annual report is released
The predecessor of Zhongnan Group, the parent company of Zhongnan Construction, was a construction contractor team, led by Chen Jinshi, with 28 people and a total of 5,000 yuan of capital to start a business.
In 2020, as the scale of the real estate industry reached its peak, Zhongnan Construction and its actual controller Chen Jinshi reached their peak. In that year, the contracted sales amount of Zhongnan Construction exceeded 200 billion yuan, and the cumulative contracted sales amount reached 223.8 billion yuan. Chen Jinshi personally ranked 388th in China's "Hurun Report" that year with a net worth of 14 billion yuan.
In recent years, with the overall recession of the real estate industry, the performance of Zhongnan Construction has fallen off a cliff. According to the latest annual report, in 2023, Zhongnan Construction's operating income will be 68.49 billion yuan, an increase of 16% year-on-year, and its net loss will be 5.29 billion yuan, a year-on-year decrease of 3.89 billion yuan.
So far, Zhongnan Construction has officially worn a hat because of the negative non-net profit deduction for three consecutive years. According to the announcement on the evening of April 22, according to the 2021, 2022, and 2023 annual reports of Zhongnan Construction, the company's audited net profit attributable to the parent company in 2021, 2022, and 2023 was -3.382 billion yuan, -9.183 billion yuan, and -5.293 billion yuan respectively, and the non-net profit deducted was -4.036 billion yuan, -9.656 billion yuan, and -4.627 billion yuan respectively, and the non-net profit deducted in the last three consecutive fiscal years was negative.
At the same time, the annual audit accounting firm issued an unqualified audit opinion on Zhongnan Construction's 2023 annual financial report with significant uncertainties related to continuing operations.
Specifically, the auditor firm of the annual report pointed out in the audit report that the net loss attributable to the parent of Zhongnan Construction in 2023 was 5.293 billion yuan, and on December 31, 2023, the current liabilities of Zhongnan Construction Company were higher than the current assets of 6.742 billion yuan, and the balance of interest-bearing liabilities including short-term borrowings and non-current liabilities due within one year totaled 22.727 billion yuan, and the balance of monetary funds at the end of the period was 7.505 billion yuan, including 3.358 billion yuan of restricted funds.
At the same time, some creditors such as financial institutions and suppliers recovered overdue debts from the relevant business entities and debtors of Zhongnan Construction Company through judicial procedures, resulting in Zhongnan Construction Company and its subsidiaries falling into a number of debt lawsuits or arbitrations. The audit report noted that these circumstances indicate significant uncertainties that could lead to significant doubts about Zhongnan Construction's ability to continue as a going concern.
According to the relevant regulations of the Shenzhen Stock Exchange, "the company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years is negative, and the audit report of the most recent year shows that there is uncertainty about the company's ability to continue operations", and the Shenzhen Stock Exchange implements other risks in its stock trading. Zhongnan Construction said that the company has experienced the above situation, and the stock has been subject to other risk warnings.
Regulators questioned the authenticity of the "white knight".
At the time of the crisis of Zhongnan Construction, on the afternoon of April 20, it was reported that led by the Haimen District Government of Nantong City, Zhongnan Construction Investment Co., Ltd., the controlling shareholder of Zhongnan Construction, and Asia's famous private equity investment company PAG Investment Group (PAG) and Jiangsu Asset Management and other institutions are negotiating cooperation in debt resolution and equity transactions. The news was confirmed by several media outlets.
In this regard, the Shenzhen Stock Exchange issued a letter of concern to Zhongnan Construction on April 22, pointing to the article "Just "Saved Wang Jianlin" PAG Investment Group and Other Big Moves", saying that on the afternoon of April 20, led by the Haimen District Government of Nantong City, the company's controlling shareholder Zhongnan Urban Construction and Asia's famous private equity investment company PAG (PAG) and Jiangsu Assets and other institutions negotiated debt resolution, equity transactions and other cooperation, and the company also confirmed the above news to the media.
The Shenzhen Stock Exchange requires the company to explain the authenticity of the matters mentioned in the above article, please explain the specific content, timeline and progress of the cooperation between Zhongnan Urban Construction and PAG, and analyze the feasibility of the relevant cooperation, and whether Zhongnan Urban Construction and the actual controller plan to carry out equity transfer, asset restructuring and other matters that have a significant impact on the company.
At the same time, the Shenzhen Stock Exchange requires Zhongnan Construction to explain the situation of media interviews, institutional and individual investor research, and reply to inquiries in the past one month, and verify whether there is any situation of releasing information that has a significant impact on the company's stock trading price or investment decisions through non-statutory information disclosure channels, whether there is any violation of the principle of fairness of information disclosure, whether there is other undisclosed information that should be disclosed, and whether there is any situation of actively catering to the market speculation of the company's stock price.
In addition, the Shenzhen Stock Exchange requires Zhongnan Construction to explain whether there have been major changes in your company's fundamentals in combination with the industry, main business operation, financial situation, etc., and provide sufficient risk warnings for large fluctuations in stock prices, and at the same time verify the company's controlling shareholders, actual controllers, more than 5% shareholders, directors, supervisors, senior managers and their immediate family members who have bought and sold the company's shares in the past month.
It is worth noting that stimulated by the news of the "white knight", on April 22, Zhongnan Construction closed the daily limit, with a full-day turnover of 83.3952 million yuan, closing at 0.84 yuan per share, and the latest market value of 3.214 billion yuan.
Although the stock price has risen sharply, Zhongnan Construction is still facing the risk of delisting at face value. On the evening of April 22, Zhongnan Construction announced for the third time that it was possible to delist. As of April 22, 2024, the closing price of Zhongnan Construction's shares has been below 1 yuan per share for 12 consecutive trading days, and there is a risk that the listing may be terminated in accordance with the above regulations.
Editor-in-charge: Wan Jianyi
Proofreading: Zhu Tianting
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