01. A failed bottom-copying
Ge Weidong, a private equity boss, was planted in chip stocks.
On April 26, the domestic analog chip leader SRP ushered in the lifting of the ban on fixed increase. Founded in 2012 and successfully listed on the A-share market in 2020, SRP's main products include signal chain analog chips and power supply analog chips, and the downstream application fields are mainly information and communication, industrial control, monitoring and security, new energy, etc. Since its establishment, it has covered core users such as Huawei, ZTE, Hikvision, Harman, and iFLYTEK, and is extending to domestic and foreign automotive customers.
In October 2023, due to the weak demand for signal chain chips, the performance and market value of SRP have shrunk significantly, in order to consolidate and develop the company's competitive advantage in the industry and improve profitability, SRP completed a private placement of 1.801 billion yuan, with a private placement issue price of 149.53 yuan per share and a lock-up period of 6 months. In the private placement list, Ge Weidong invested 288 million yuan to subscribe for 1.926 million shares.
At that time, a general consensus in the industry was that semiconductors were in a downward cycle, and after this cycle, companies represented by SRP would usher in a rebound. However, the six-month lifting period has arrived, and SRP has not been able to wait for spring. On the morning of April 26, the share price of SRP opened low and hovered around 91 yuan, a loss of nearly 40% compared with the issue price of the private placement. According to Ge Weidong's subscription of 1.926 million shares, the private equity boss lost 114 million in half a year.
▲ (The stock price trend of SRP.) Source/Baidu Stock Market)
It's not just the Siruipu family that gives Ge Weidong a headache.
In December 2023, BLT, known as the "first 3D printing stock on the Science and Technology Innovation Board", expanded its production through a fixed increase, raising 3.01 billion yuan at an issue price of 94.50 yuan per share, and the restriction period is also 6 months. Ge Weidong appeared on the fixed increase list and was allocated 1.5873 million shares at a total price of 150 million yuan.
On the morning of April 26, BLT's share price closed at around 79 yuan. There are less than 2 months left before the lifting of the ban, and if BLT's share price cannot usher in a substantial increase, it will be difficult for Ge Weidong to recover his capital.
It is worth mentioning that from the perspective of the fundraising situation and internal changes of the two companies, it is not that Ge Weidong has not been given an early warning.
Originally, the expected amount of fixed increase raised by SRP was 4 billion, but in the end it was only completed less than half, which has shown that the market is vigilant. At the beginning of 2024, despite the opposition of the outside world, SRP spent 890 million yuan to acquire 85.2574% of the equity of loss-making peer Chuangxin Micro at a high premium of 317.23%, trying to extend customers to consumer electronics fields such as OPPO, OnePlus, and Xiaomi.
However, after one operation, in 2023, SRP will achieve revenue of 1.094 billion yuan, a year-on-year decrease of 38.68%, and a net profit loss attributable to the parent company of 34.713 million yuan, a year-on-year decrease of 113.01%, which is the company's first loss since its listing in 2020. To this end, the explanation given by SRP is that the company's product sales are under pressure mainly due to factors such as the economic situation, the end market demand is less than expected, and the market competition is fierce.
Another BLT, although its revenue and net profit will increase in 2023, the company's share price has fallen all the way after reaching a high of 137 yuan in July 2023. The company has disclosed a number of announcements of executive increases in the hope of boosting the stock price, but the results have been limited.
02. The fixed increase method fails
As a well-known private equity boss in the industry and a super bull, Ge Weidong once made a lot of money by relying on the "fixed increase method".
In May 2017, Ge Weidong participated in the private placement of Tibet Pharmaceutical at a price of 36.48 yuan, with a lock-up period of 3 years. At the beginning of participating in the private placement, the share price performance of Tibet Pharmaceutical was not good, reaching a low of 24 yuan in 2018. Ge Weidong is worthy of being a big man, and he has been lurking.
In 2020, the share price of Tibet Pharmaceutical ushered in an explosive rise, reaching a maximum of 182 yuan, which was 5 times faster than the fixed increase price, coupled with the implementation of Tibet Pharmaceutical Co., Ltd. to increase 4 shares for every 10 shares, which magnified the value of the fixed increase in Ge Weidong's hands. Ge Weidong waited for the opportunity to transfer these fixed increase shares and the shares that were added to the later position to his sister Ge Guilan, and Ge Guilan quickly sold off at a high level. In this round of three-year investment, Ge Weidong and his sister made a profit of more than 1 billion.
In July 2019, Ge Weidong subscribed to iFLYTEK at a price of 27.15 yuan per share, spending 400 million yuan to subscribe for 14.76 million shares, with a 12-month restriction period. By the time the ban was lifted, iFLYTEK's shares were nearly 40 yuan, and Ge Weidong's fixed increase in shareholding exceeded 40%.
In August 2019, Ge Weidong subscribed for 5.035 million shares of GigaDevice at a price of 75.47 yuan per share, spending about 380 million yuan, with a lock-up period of 12 months.
In August 2020, the lifting period expired, GigaDevice's share price exceeded 150 yuan, and during this period, GigaDevice also implemented 4 shares for every 10 shares, calculated by 7.049 million shares after expansion, the above-mentioned private placement shares have risen from the initial value of 380 million yuan to more than 1 billion yuan, and Ge Weidong has made a floating profit of more than 600 million yuan in 1 year.
The taste of making a lot of money seems to have deepened Ge's confidence in this technology stock. In June 2020, Ge Weidong participated in the private placement again and bought 1.5 billion in one fell swoop. As of March this year, Ge Weidong held 18.722 million shares, becoming the company's third largest shareholder.
The good luck that belongs to Ge Weidong is not always there. Especially after entering 2021, with the downward shock of the market, Ge Weidong's statute method has failed somewhat.
As early as 2017, Ge Weidong opened a position in Yonyou Network and witnessed the latter's stock price rise from a single digit to a peak of more than 50 yuan in mid-2020. In January 2022, Ge Weidong spent 200 million yuan at a price of 31.95 yuan per share to obtain 6,259,780 private placement shares, becoming the fifth largest shareholder. After the expiration of the ban period of 6 months, the share price of Yonyou continued to decline to 20 yuan. Ge Weidong couldn't wait for this "old friend" to make a comeback, and quietly withdrew from the top ten shareholders soon after.
In October 2021, Ge Weidong was allocated 925,300 shares of Anheng Information at a fixed issue price of 324.23 yuan, with a subscription amount of nearly 300 million yuan. It is worth noting that the private placement price of Anheng Information exceeded the company's stock price in the secondary market (314.99 yuan / share), which is a premium issuance, which shows that the institution is optimistic about it.
In April 2022, the lifting period expired, and its stock price was less than 130 yuan.
In November 2022, Ge Weidong made another move, spending 270 million yuan to participate in the private placement of Xiangdian shares at an issue price of 17.60 yuan per share, and after the lock-up period of 6 months expired, in May 2023, the company's stock price stayed below 17 yuan, and Ge Weidong also responded by reducing his holdings.
Generally speaking, the purpose of private placement of listed companies is usually enterprise expansion, mergers and acquisitions, technological innovation, etc., and the use of financing funds will improve corporate performance and bring about the possibility of enterprise value growth. The popular explanation of the fixed increase is "buying stocks at a discount", which is lower in cost and more profitable than buying directly in the stock market. Therefore, the fixed increase has become a good opportunity for Ge Weidong and other bigwigs to "pick up leaks". At the same time, the lock-up period of the private placement determines its risk and unknownness, which is vividly reflected in the ups and downs of the stock price of the private placement company.
The outside world cannot know exactly when Ge Weidong sold the private placement shares, however, an obvious data is that in 2022, Ge Weidong will rank 1023rd on the Hurun Global Rich List with a wealth of 22 billion yuan. In the 2024 Hurun Global Rich List, Ge Weidong's wealth shrank to 16 billion, and his ranking slipped to 1,632.
Author | Chen Chang
Edit | Han Zhongqiang
Operations | Liu Shan