Financial reporter Liu Jian
Because the company had violations such as failure to disclose related party transactions in a timely manner and inaccurate disclosure of performance forecasts, on May 14, Yicheng Xinneng and related parties received a regulatory letter from the Shenzhen Stock Exchange, requiring them to learn lessons and rectify them in a timely manner. Previously, the company had just been issued a warning letter by the Henan Securities Regulatory Bureau. It is worth noting that due to the impact of the industry's environment, Yicheng New Energy's performance in 2023 will decline sharply, and the net profit in the first quarter of this year will be in a state of loss, and the project that originally planned to raise 2.305 billion yuan to invest in the photovoltaic and lithium battery industries was also announced to be terminated recently.
The Shenzhen Stock Exchange issued a regulatory letter
On May 14, the Shenzhen Stock Exchange issued a regulatory letter to Henan Yicheng New Energy Co., Ltd. and related parties. The company mainly has the following violations: 1. Inaccurate disclosure of the realization of performance commitments in 2022. The company's wholly-owned subsidiary, Kaifeng Pingmei New Carbon Material Technology Co., Ltd., disclosed inaccurate disclosure of the realization of the 2022 annual performance commitment. In April 2024, the company corrected the realization of Kaifeng Carbon's 2022 annual performance commitment, and the realization of Kaifeng Carbon's 2022 annual performance commitment disclosed before the correction was inaccurate.
2. Failure to fulfill information disclosure obligations in a timely manner for related-party transactions. In November 2023, Henan Zhongyu Materials Trading Co., Ltd. signed a procurement contract for all-vanadium liquid flow equipment with Kaifeng Times New Energy Technology Co., Ltd., a holding company of the company, with a contract amount of 404 million yuan. The actual purchaser of the relevant equipment is an enterprise controlled by China Pingmei Shenma Holding Group Co., Ltd., the controlling shareholder of the Company, and the relevant transactions constitute related party transactions, and the Company fails to perform the review procedures and disclosure obligations in a timely manner for the relevant daily related party transactions.
3. Inaccurate disclosure of performance forecast information. The net profit after deducting non-recurring gains and losses disclosed in the company's 2023 annual performance forecast is quite different from the data disclosed in the 2023 annual report, and the direction of profit and loss has changed. The disclosure of the company's 2023 annual results forecast information is inaccurate.
The company's relevant conduct violated the relevant provisions of the GEM Listing Rules. Wang Anle, as the chairman of the company, Cao Deyu as the company's general manager at the time, Chang Xinghua as the secretary of the company's board of directors, Wang Shangfeng as the company's financial director, and Yang Fan as the company's then chief financial officer, are responsible for the company's relevant violations. The Shenzhen Stock Exchange requires the board of directors of the company to pay full attention to relevant issues, learn lessons, rectify them in a timely manner, and prevent the recurrence of relevant problems.
Yicheng Xinneng also announced that the company received the "Administrative Supervision Measures Decision" issued by the Henan Securities Regulatory Bureau on May 10, in response to the above violations, the Henan Securities Regulatory Bureau decided to issue a warning letter to the company and Wang Anle, Cao Deyu, Chang Xinghua, Wang Shangfeng, Yang Fan to take administrative supervision measures, and recorded in the securities and futures market integrity file, requiring a written rectification report to be submitted within 30 days from the date of receipt of the decision.
The performance has declined sharply
Founded in 1997 and listed on the Shenzhen Stock Exchange in 2010, Yicheng Xinneng is headquartered in Kaifeng City, Henan Province. The company focuses on the new energy and new material industries, and its industrial layout covers "green energy, energy storage, and carbon materials". The main businesses involved in the new energy industry include: investment, construction and operation of high-efficiency monocrystalline silicon cells and photovoltaic power stations, production and sales of lithium-ion batteries, and development, construction and operation of all-vanadium flow energy storage power stations; The main business involved in the new material industry is: production and sales of ultra-high power graphite electrodes and anode materials.
Affected by the industry environment, the company's performance in 2023 has declined sharply.
Yicheng New Energy's 2023 annual report shows that in 2023, the company will achieve revenue of 9.884 billion yuan, a year-on-year decrease of 12.10%; The net profit attributable to the parent company was 46.0638 million yuan, a year-on-year decrease of 90.46%.
The revenue scale of the company's main products has almost all declined sharply, of which the revenue of cells fell by 11.94% year-on-year, and the gross profit margin was 8.74%; The revenue of graphite electrodes and related products fell by 48% year-on-year, and the gross profit margin was only -2.68%.
Regarding the decline in performance, the company said that in 2023, the operating rate of downstream electric arc furnace steelmaking enterprises of graphite electrodes will be insufficient, and the supply of graphite electrode industry will exceed demand, resulting in a decline in the volume and price of graphite electrode products, the operating rate of the company's needle coke production line is insufficient, and the profitability of carbon business will decline sharply. In 2023, the industry concentration of leading enterprises in anode materials will be further improved, which will have a greater impact on the prices of anode materials and graphitization processing, and the gross profit margin of the company's anode materials and graphitization processing will decline more. In 2023, the price of lithium battery products will continue to fall, profit margins will be seriously compressed, export orders will be significantly reduced, and the operating rate will be seriously insufficient. In order to promote the technological transformation of photovoltaic cell projects and accelerate the construction of photovoltaic module material projects, anode material projects, photovoltaic power stations and other projects, the company purchased production equipment in the form of bank loans and financial leases, resulting in an increase in financial expenses.
In the first quarter of this year, the company's decline continued. According to the first quarter report of 2024, the company's revenue was 885 million yuan, a year-on-year decrease of 58.77%, and the net profit attributable to the parent company was -69.8704 million yuan. At present, the company has lost net profit attributable to the parent company for two consecutive quarters, and the net loss in the fourth quarter of last year was 53.1657 million yuan.
The proposed 2.305 billion yuan private placement fund-raising project was terminated
Just recently, Yicheng New Energy's private placement fundraising project was also terminated.
In March last year, Yicheng New Energy disclosed a fixed increase plan, planning to raise no more than 2.5 billion yuan for expanding the production capacity of lithium-ion battery anode materials and building distributed photovoltaic power stations and other projects. Later, after adjustment, the total amount of funds raised by issuing shares was reduced to no more than 2.305 billion yuan (including this number), which was used for the development and production of lithium-ion battery anode materials (phase II), the annual output of 30,000 tons of high-performance lithium-ion battery anode materials project, the 100MW distributed photovoltaic power station project in Baofeng County, the 50MW distributed photovoltaic power station project in Weidong District, and the replenishment of working capital.
Yicheng New Energy announced on May 6 this year that it would terminate its original plan to issue shares to specific targets to invest in projects such as lithium battery material production capacity. On May 13, the company received a review decision issued by the Shenzhen Stock Exchange, deciding to terminate the review of the company's application for issuing shares to specific targets.
At present, the photovoltaic industry is facing the dual pressure of overcapacity and price competition, and the competition in the lithium battery market is also very fierce. The lithium-ion anode material project and photovoltaic power station project that Yicheng New Energy plans to invest in are obviously already at great risk.
According to statistics from the China Photovoltaic Industry Association, in 2023, the output of polysilicon, silicon wafers, cells and modules in mainland China will increase by 66.9%, 67.5%, 64.9% and 69.3% year-on-year, respectively. 216.88GW of new PV capacity was added for the year, a year-on-year increase of 148.1%, a record high, close to the sum of the previous four years; However, by the end of 2023, the winning bid price of modules has fallen below RMB 1/W, a sharp drop of more than 40% from the beginning of the year.
After the rapid expansion of the lithium battery industry chain from 2020 to 2022, the market will gradually show "fatigue" in 2023, which is mainly reflected in three aspects: a significant reduction in new bidding projects, a low completion rate of corporate goals, and a halving of product prices. In 2023, lithium batteries for power tools will continue to be destocked, and it is expected that the destocking will come to an end at the end of 2024, and the industry inflection point is coming.
The company said that the company's termination of the private placement is a decision made after comprehensive consideration of the current capital market policy changes, the company's development plan and market financing environment and many other factors, and full communication and prudent analysis with relevant parties.
In the secondary market, Yicheng New Energy's share price has fallen by more than 17% since the beginning of this year. As of press time, the company's market value is about 8.6 billion yuan.