Sinovatio's large orders decreased by 38.15 million in the first quarter, and the four institutions of Shenzhen Capital reduced their holdings by no more than 2.59%

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Xu Jia

Listed for more than six years, Sinovatio (002912. SZ) was reduced by the controlling shareholder for the first time.

On the evening of April 24, Sinovatio disclosed the shareholder reduction plan, and the company's shareholders Guangdong Laterite Venture Capital Co., Ltd., Nanjing Laterite Venture Capital Co., Ltd., Kunshan Hongtu High-tech Venture Capital Co., Ltd., Zhengzhou Braim Innovation Capital Venture Capital Co., Ltd., Nanjing Chuangyun Enterprise Management Consulting Partnership (Limited Partnership), Nanjing Zhongjue Enterprise Management Consulting Partnership (Limited Partnership) (hereinafter referred to as "Guangdong Red Clay", "Nanjing Red Clay", "Kunshan Red Clay", "Zhengzhou Bairui" and "Nanjing Chuangyun" respectively) Nanjing Zhongjue") intends to reduce the total number of shares of the company not more than 5.1225 million shares, accounting for 2.9999% of the company's total share capital.

The Yangtze River Business Daily reporter noted that among the above-mentioned subjects to be reduced, Guangdong Laterite, Nanjing Laterite, Kunshan Laterite, and Zhengzhou Bairui are the concerted actors of Shenzhen Innovation Investment Group Co., Ltd. (hereinafter referred to as "Shenzhen Capital Group"), the controlling shareholder of Sinovatio, and it is also the first time that Sinovatio plans to reduce its holdings after listing, with a total of no more than 4.415 million shares of the company, accounting for 2.5856% of the company's total share capital.

As venture capital funds or private equity investment funds, the above four institutions have been in existence for more than 10 years and are all in the exit period.

In the first quarter of this year, Sinovatio's operating income was 84.8959 million yuan, a year-on-year decrease of 60.58%, and the net profit and net profit after deducting non-recurring gains and losses (deducting non-net profit, the same below) were -38.1549 million yuan and -39.021 million yuan respectively, with a year-on-year profit and loss.

Sinovatio said that the sharp decline in the company's operating income was mainly due to the acceptance and recognition of revenue from large orders in the same period last year, and the recognition of revenue from no large-scale orders in the current period.

The six institutions plan to reduce their holdings by no more than 3% in total

According to the shareholding reduction plan, Guangdong Laterite, Nanjing Laterite, Kunshan Laterite, and Zhengzhou Bairui plan to reduce their holdings of Sinovatio shares by no more than 2,141,600 shares, 823,700 shares, 823,700 shares, and 626,000 shares, accounting for 1.2542%, 0.4824%, 0.4824%, and 0.3666% of the company's total share capital, and the total number of shares to be reduced by the company does not exceed 4.415 million shares, accounting for 2.5856% of the company's total share capital.

At the same time, Nanjing Chuangyun and Nanjing Zhongjue plan to reduce their holdings of the company's shares by no more than 610,000 shares and 97,500 shares respectively, accounting for 0.3572% and 0.0571% of the company's total share capital, and the total number of shares of the company will not exceed 707,500 shares, accounting for 0.4143% of the company's total share capital.

To sum up, the above six shareholders plan to reduce their holdings of Sinovatio shares by a total of 5.1225 million shares, accounting for 2.9999% of the company's total share capital. Based on the closing price of 20.38 yuan per share in the secondary market of Sinovatio on April 25, the reference market value of the above-mentioned shareholders to reduce their holdings is 104 million yuan.

The Yangtze River Business Daily reporter noticed that among the main bodies to be reduced this time, Guangdong Laterite, Nanjing Laterite, Kunshan Laterite and Zhengzhou Bairui are the concerted actors of Shenzhen Capital Group, the controlling shareholder of Sinovatio, and Nanjing Chuangyun and Nanjing Zhongjue are the concerted actors of Ling Dongsheng, director and general manager of Sinovatio.

Before the IPO, Shenzhen Capital Group directly held 35.568% of the shares of Sinovatio, was the controlling shareholder of the company, and controlled 47.025% of the company's shares together with Guangdong Laterite, Nanjing Laterite, Kunshan Laterite, Zhengzhou Bairui, etc.

In November 2017, Sinovatio was listed on the A-share market, and in the more than six years since then, Shenzhen Capital Group and its concerted actors have not reduced their holdings of Sinovatio's shares. In other words, this reduction is also the first time that Guangdong Laterite, Nanjing Laterite, Kunshan Laterite, and Zhengzhou Bairui plan to reduce their holdings of Sinovatio shares.

For the reasons for the reduction, the announcement shows that Guangdong Laterite, Nanjing Laterite, Kunshan Laterite, and Zhengzhou Bairui are all venture capital funds or private equity investment funds, and their existence has been more than ten years and are all in the exit period.

At present, the above four institutions hold a total of 14.665 million shares of Sinovatio, accounting for 8.5885% of the company's total share capital. At the same time, as of the end of March this year, Shenzhen Capital still directly held 45.527 million shares of Sinovatio, with a shareholding ratio of 26.66%.

Nanjing Chuangyun and Nanjing Zhongjue are not the first time to reduce their holdings in Sinovatio. According to the announcement, in December 2020, Nanjing Chuangyun and Nanjing Zhongjue reduced their holdings of the company's shares by 444,000 shares and 373,300 shares respectively. In April 2022, Nanjing Chuangyun and Nanjing Zhongjue reduced their holdings of 1.6456 million shares and 1.115 million shares of the company respectively.

From December 29, 2022 to January 3, 2023, Nanjing Chuangyun and Nanjing Zhongjue reduced their holdings of 2.4214 million shares of the company through block trading, accounting for 1.4092% of the company's total share capital.

In 2023, it will turn losses into profits of 114 million

As the only listed company controlled by Shenzhen Capital Group, Sinovatio's main business is the research and development, production and sales of network visualization infrastructure, network content security, big data operation, data and network security, as well as technical services such as installation, commissioning and training of related products.

A few days ago, Sinovatio disclosed its performance. In 2023, the company will achieve operating income of 653 million yuan, a year-on-year increase of 49.9%, and net profit and non-net profit will be 114 million yuan and 87.1557 million yuan respectively, a year-on-year increase of 193.59% and 163.74%, both of which will turn losses into profits.

The Yangtze River Business Daily reporter noted that from 2020 to 2022, Sinovatio had achieved operating income of 954 million yuan, 694 million yuan, and 436 million yuan respectively, a year-on-year increase of 5.48%, -27.27%, and -37.2%, and a net profit of 248 million yuan, 56.2683 million yuan, and -122 million yuan, a year-on-year decrease of 16.04%, 77.29%, and 316.93%, and the performance declined until the loss for three consecutive years.

In this regard, Sinovatio said that in 2023, the investment and construction needs of the government, operators, enterprises and institutions in the fields of infrastructure network construction and network data security will be gradually released. Combined with the internal and external situation, the needs of the company's subdivided industries will be further implemented in 2023, and some related projects of major domestic industry customers have won bids or signed orders, and the annual operating income has increased significantly year-on-year.

According to the industry in which the customer is located, in 2023, Sinovatio's operating income from the government and operators will be 264 million yuan and 306 million yuan respectively, a year-on-year increase of 3.77% and 123.39%, and the gross profit margin will be 65.07% and 90.28%, a year-on-year increase of 11.84 and -0.35 percentage points.

However, in the first quarter of this year, Sinovatio achieved operating income of 84.8959 million yuan, a year-on-year decrease of 60.58%, and net profit and non-net profit were -38.1549 million yuan and -39.021 million yuan respectively, a year-on-year decrease of 164.62% and 194.56%.

Sinovatio said that the sharp decline in the company's operating income was mainly due to the acceptance and recognition of revenue from large orders in the same period last year, and the recognition of revenue from no large-scale orders in the current period.

It is understood that in 2022, Sinovatio signed a major contract with China Mobile Communications Group Co., Ltd. (with an amount of 198 million yuan), and the company actively fulfilled the obligations of the contract, and completed the acceptance in the first quarter of 2023, achieving revenue of 171 million yuan.

It is worth mentioning that since Sinovatio's revenue mainly comes from network visualization infrastructure products (i.e., broadband network products and mobile network products), the end users of such products are mainly government agencies, operators, enterprises and institutions, and the peak demand of the end user market usually occurs in the second half of the year, especially in the fourth quarter, resulting in the relative concentration of orders and revenue recognition for such products in the second half of the year, which in turn leads to the company's operating income showing certain seasonal characteristics.