From only 1 lot traded throughout the day with a turnover of less than 600 yuan, to a daily turnover rate of more than 3% and a turnover of more than 26 million yuan, the share price of TEDA New Materials was suddenly suspended due to the withdrawal of market makers after a month of "soaring".
TEDA New Materials recently disclosed that Guoyuan Securities withdrew from its market-making on May 8, with less than two market makers and non-compliance with the relevant regulations of the stock transfer company, and was suspended on the 9th, and then suspended for verification due to large stock price fluctuations. The regulator then issued an inquiry, asking the company to explain the reasons for the large increase in stock and the sharp increase in performance.
With the "trimellitic anhydride (TMA) concept", the stock price has risen since the beginning of April, with a cumulative increase of nearly 2 times in the month, and there is no limit on the price limit of the new third board market-making transactions, and the stock has risen by more than 94% in a single day in the month. Before the suspension, TEDA New Materials had risen by more than 6 times in a month, with a cumulative turnover of more than 90 million yuan.
Why did market makers suddenly withdraw? There is a view that there may be a short-selling market maker situation in a wave of TEDA new materials.
"From the company's announcement and the recent market trend of the company, it cannot be ruled out that this is an act of short-selling market makers." Zhou Yunnan, founder of Beijing Nanshan Investment, believes that the treasury shares of Guoyuan Securities, one of the market makers, have been continuously bought, driving the company's stock price to soar. Some people in the industry believe that the possibility of (short squeeze) cannot be ruled out, but it cannot be determined according to public information.
There are also new third board veterans who believe that market makers or take the initiative to sell. Yu Wei, an expert of the Economic Development Working Committee of the China Association of Moderately Prosperous Construction, told reporters that "the market makers who have withdrawn may also have taken the initiative to sell their positions, after all, the company's stock price has risen greatly in a short period of time and has made huge profits."
The IPO failed twice, and the first company to be rejected on the Beijing Stock Exchange, TEDA New Materials was once concerned by the market. In 2014, it was listed on the New Third Board, in February 2016, and in 2017 and 2022, it successively sprinted to the Growth Enterprise Market and the Beijing Stock Exchange.
The stock price "soared", rising nearly 2 times in a single month
The background of this round of soaring TEDA New Materials is the continued popularity of the TMA (trimellitic anhydride) concept. Since April, the TMA market has been hot due to the rising price of trimellitic anhydride, a chemical raw material. Zhengdan shares, a concept stock, have risen by more than 400% in the past month.
Founded in 1999, TEDA New Materials is a sub-industry company in the chemical industry, and the company's leading product is trimellitic anhydride. There are not many domestic manufacturers engaged in the production of this product, and the manufacturers are mainly distributed in Jiangsu and Anhui, including Baichuan Co., Ltd., Zhengdan Chemical, etc.
TEDA New Materials, which is also a TMA concept stock, also ushered in a sharp rise in stock prices. Before the suspension, in the three trading days since May (May 6 to May 8), TEDA New Materials has risen by 150%, with single-day increases of 17.57%, 68.47% and 26.21% respectively, with a daily turnover of 10.25 million, 18.32 million and 26.4 million yuan.
According to Oriental Fortune data, in the past month (April 2 to May 8), TEDA New Materials has increased by 648.8%, with a cumulative turnover of 97.73 million yuan.
Compared with before, TEDA New Materials was once "cold" in the secondary market, with only 1 buy order on some trading days, and the daily turnover was less than 600 yuan.
According to Wind, in the first three months of this year, the average daily turnover of TEDA New Materials was about 68,000 yuan, and the average daily trading volume was about 11,000 shares. Among them, on March 5, the turnover of TEDA New Materials was 608 yuan, and there was only 1 lot bought on the same day. On December 27 and December 29 last year, the stock was only bought by 1 lot and 2 lots in a single day, with a daily turnover of 592 yuan and 1184 yuan.
The secondary market is sought after, and the number of shareholders of TEDA New Materials has increased sharply. As of the close of trading on May 8, the company had more than 200 shareholders, compared to 74 common shareholders at the end of last year.
However, a month after the surge, TEDA New Materials was suddenly suspended due to the withdrawal of market makers. Guoyuan Securities withdrew from providing market-making quotation services for the company on May 9, and due to less than two market makers, TEDA New Materials will be suspended from that day. At the same time, TEDA New Materials increased the suspension verification of abnormal stock price fluctuations.
Regulatory inquiries followed. On May 11, the National Equities Exchange and Quotations Company issued a letter of inquiry to TEDA New Materials, requiring the company to explain the large increase in stock trading prices and the substantial increase in performance.
Are market makers forced to short or voluntarily exit?
After the withdrawal of Guoyuan Securities, there was only one market maker left in TEDA New Materials, which was Huayuan Securities (formerly known as Kyushu Securities).
TEDA New Materials currently belongs to the innovation layer and began to make a market-making transfer on February 16, 2016. In mid-April this year, Changjiang Securities, one of the market makers, withdrew.
Why did Guoyuan Securities withdraw?
Zhou Yunnan mentioned that due to the implementation of a single market-making transaction on the New Third Board, there will be an extreme long behavior in a single market-making transaction, that is, continuing to buy the market maker's treasury stocks, "the market maker has to keep reporting the high price, and the less the inventory stock in the hands of the market maker in the back, the easier the price will soar."
"In the new third board market-making tickets around 2015, there is often such an extreme situation of buying up market makers to achieve a sharp surge in stock prices." He mentioned.
"Whether there is a (short squeeze) cannot be seen from the transaction, only from the result." The above-mentioned new third board investors said that the stock price rose rapidly within a few days, and the superimposed withdrawal announcement did not rule out the possibility of being forced to short, but it could not be determined.
Yu Wei believes that the possibility of market makers taking the initiative to sell is not ruled out.
"For market makers on the New Third Board, there is no requirement for buy and sell orders on how many shares must be placed at each price, and only need to provide buy and sell quotations on the trading day. In addition to fulfilling market-making obligations, market makers can also be regarded as investment institutions, pursuing investment returns and not blindly buying large sums of high-priced chips. He mentioned.
According to the stock transfer regulations, the company needs to restore the number of market makers to more than 2 within 30 trading days, otherwise it will be forced to change to a call auction trading method.
As of May 8, TEDA New Materials closed at 46.8 yuan per share, with a daily trading volume of 580,000 shares, a daily turnover of 26.4 million yuan, and a total market value of 2.036 billion yuan.
"The key is that with such a high price, it is not easy to find a new market maker, unless there are shareholders who are willing to privately trade large discounts to new brokers." Zhou Yunnan thinks.
"It's still very difficult to add another market maker, and a new brokerage has no tickets in hand, and it can't trade if it's suspended." Yu Wei believes that if no new market maker can be found, TEDA New Materials will become a bidding transaction. "Most of the new third board companies are selected for bidding transactions, and TEDA New Materials does not have to continue to maintain market-making transactions."
Performance fluctuations have been a matter of concern
In addition to the stock price, TEDA New Materials has been concerned by the market for its bumpy road to listing. When the A was rushed twice, the performance growth was the focus of regulatory attention.
Since 2019, TEDA New Materials has entered a period of rapid growth in performance, with revenue increasing year by year, and the average annual growth rate of revenue in the past five years is close to 30%. In 2020, the net profit attributable to the parent company increased by 516% year-on-year.
According to the annual report, from 2019 to 2023, the company's operating income will be 139 million yuan, 209 million yuan, 282 million yuan, 355 million yuan and 474 million yuan respectively, and the net profit attributable to the parent company will be 5.7406 million yuan, 35.3883 million yuan, 65.8168 million yuan, 35.2562 million yuan and 49.4581 million yuan.
The revenue and profit growth of TEDA New Materials has always been a key issue for the exchange.
As early as 2017, when it broke through the GEM, the Issuance Examination Committee paid attention to the decline in the company's main business income in 2016, but the non-net profit did not decline simultaneously. In that year, TEDA New Material's operating income was 175 million yuan, a year-on-year decrease of 15.06%; The non-net profit was 26.8917 million, a year-on-year increase of 0.13%.
When breaking through the Beijing Stock Exchange in 2022, the authenticity of TEDA New Materials' performance was once again concerned. In September of that year, when the Beijing Stock Exchange of TEDA New Materials was at the meeting, the Beijing Stock Exchange asked the company to explain that the net profit from 2016 to 2019 showed a significant downward trend, but it increased significantly in 2020, and the main influencing factors for the net profit to change the downward trend and rise sharply in that year.
Just recently, in a recent letter of inquiry, the stock transfer company asked the company to explain the reasons for the sharp increase in revenue.
(This article is from Yicai)