Tianchen Co., Ltd. (600620), a listed real estate company in Shanghai, was suddenly attacked by private equity funds.
On May 17, Hangzhou Qingzhe Investment Management Co., Ltd. - Qingzhe Herong No. 7 Private Securities Investment Fund (hereinafter referred to as "Hangzhou Qingzhe") submitted a temporary proposal to Tianchen Co., Ltd. for the 2023 Annual General Meeting of Shareholders. Hangzhou Qingzhe put forward two requirements in the temporary proposal, one is to require listed companies to repurchase shares, and the other is to require listed companies to clarify transformation plans and measures.
The reporter of Securities Times E Company noticed that for Hangzhou Qingzhe's proposal, Tianchen shares only agreed to submit the first proposal to the annual general meeting of shareholders for consideration, but made it clear that there were no "idle funds".
Attacked by private equity funds
Hangzhou Qingzhe pointed out that there has been a large amount of idle cash on the account of Tianchen shares for a long time, and there is no investment in effective production and operation activities, nor dividends to return to shareholders, which is a great waste of resources. At the same time, the company's operation has not changed substantially for a long time, and the progress and effect of strategic transformation are also very insignificant, which has a lot to do with the lack of effective incentive mechanism for the management team and the lack of binding with the interests of shareholders.
Based on the above reasons, Hangzhou Qingzhe suggested that Tianchen shares repurchase the company's shares for management equity incentives in a centralized bidding transaction. The total amount of repurchase funds shall not be less than 150 million yuan (inclusive) and not more than 200 million yuan (inclusive). The repurchase price does not exceed 8 yuan/share (as of the close of May 17, the share price of Tianchen shares closed at 5.55 yuan/share.) ）。
In this regard, Tianchen said that the proposal for the repurchase does not violate the relevant regulations and can be submitted to the company's 2023 annual general meeting of shareholders for consideration and voting. However, the proposal has not been deliberated and voted on by the board of directors of the company, and the board of directors of the company has not formulated a relevant repurchase plan.
"The statement that 'there has been a large amount of idle cash on the company's books for a long time' does not match the reality." Tianchen said that as of the end of the first quarter, the company's book currency fund balance was 411 million yuan, of which the balance of the fund supervision account opened due to the bank development loan requirements was 274 million yuan, and the company's bank loan balance was 409 million yuan in the same period, and some important projects have been started or have been gradually carried out, requiring corresponding capital investment.
The board of directors of Tianchen shares said that the company does not have a large amount of idle funds, and there is great uncertainty about whether there are other idle funds used to repurchase the company's shares under the condition of satisfying the company's normal operation.
Hangzhou Qingzhe also pointed out that in view of the current main business positioning of Tianchen shares real estate and taxi operations, which do not belong to the sunrise industry, and the company has not shown its operating ability and competitive advantage in these two industries, in order to reflect the value of listed companies, it must be transformed.
In Hangzhou Qingzhe's view, although the board of directors of listed companies has long made it clear that they want to transform the big health and new energy industries, there has been no clear timetable, and really effective measures, as well as actual results, "strategic transformation requires the company to invest huge resources, make extra efforts, set clear goals for the management team, and supplemented by attractive incentive mechanisms are necessary conditions for success."
"During the macroeconomic transition, market opportunities are fleeting, and the board and management need to have the necessary sense of urgency to show all shareholders the determination, clear plan, strong execution and positive progress of the transformation." Hangzhou Qingzhe said.
For the second temporary proposal, Tianchen believes that the content of the proposal does not have a clear topic or specific resolution, does not meet the relevant regulations, and will not be submitted to the company's 2023 annual general meeting of shareholders for deliberation.
A real estate company that makes a profit on investment income
According to the enterprise investigation, Hangzhou Qingzhe was established in 2015 with a registered capital of 10 million yuan. According to the website of the Asset Management Association of China, the management scale of Hangzhou Qingzhe ranges from 500 million yuan to 1 billion yuan. The actual controllers of the fund are natural persons Yang Liu and Qu Qinghai.
Hangzhou Qingzhe appeared for the first time in the first quarter report of Tianchen shares in 2023, holding 9.9357 million shares at the end of the period, with a shareholding ratio of 1.45%. As of the end of the first quarter of this year, Hangzhou Qingzhe's shareholding increased to 46.3753 million shares, with a shareholding ratio of 6.75%. Since April 2023, the share price of Tianchen shares has fallen by 56.91%, with a weighted average price of 9.572 yuan per share. If the weighted average price of this range is viewed, Hangzhou Qingzhe's shareholding has suffered a floating loss.
Tianchen Co., Ltd. is a veteran real estate listed company in Shanghai, and its predecessor Liannong Co., Ltd. has been listed since 1992.
According to media reports, in 2000, Shanghai Zhongsheng Hongqiao Real Estate Development Co., Ltd. (hereinafter referred to as "Zhongsheng Hongqiao"), then the second largest shareholder of Tianchen Co., Ltd., acquired 15.54% of the state-owned legal person shares in the hands of Shanghai County Real Estate Corporation, the largest shareholder, and became the controlling shareholder of the listed company. The founders of Zhongsheng Hongqiao are Ye Lirun and Zhou Yuehua from the Ye family in Shanghai.
In 2011, Mr. and Mrs. Ye Lirun transferred 100% of their equity in Zhongsheng Hongqiao to Xinsheng Real Estate. After the equity transfer, the actual controller of Tianchen shares was changed to Ye Lipei (Ye Lirun's brother) and Ye Maojing father and son.
Born in 1944, Yip is said to have made his first pot of gold through the textile trade after moving to Australia. In 1989, Ye Lipei founded Zhongsheng Group, a wholly foreign-owned real estate company in Shenzhen. Zhongsheng Group has developed many well-known real estate projects in Shanghai. On the 2023 Hurun Report, the Ye Lipei family ranks 370th with a wealth of 15.5 billion yuan.
As a listing platform under the real estate tycoon, the operation of Tianchen shares is somewhat unsatisfactory. In the past few years, Tianchen's main real estate business has been stagnant, and the company has barely achieved tens of millions of yuan a year by relying on taxi business, property management, property leasing, etc. Profits are mainly derived from investment income.
Under the downturn in the main business, the transformation expectation of Tianchen shares once attracted the attention of capital. Guohua Life Insurance, owned by capital tycoon Liu Yiqian, has raised Tianchen shares four times.
Tianchen shares have indeed moved. In 2015, the company plans to enter the environmental protection industry through mergers and acquisitions. In 2016, the company was suspended and reorganized, and planned to enter the education industry. But both restructurings failed.
In 2020, Tianchen Co., Ltd. "restarted" the real estate business and invested in the construction of "Tianchen Health City". Since 2022, the stock real estate project of "Tianchen Health City" has achieved sales, which has increased the company's annual revenue to more than 200 million yuan. However, due to the decline in investment income, the company's net profit continued to decline.
In the first quarter of this year, Tianchen's revenue was 3.9789 million yuan, a year-on-year decrease of 93.97%; The loss was 19.8815 million yuan, a year-on-year decrease of 365.71%. The reason for the change in performance was the unrealized sale of real estate.
Editor-in-charge: Shi Jian | Review: Li Zhen | Supervisor: Wan Junwei
(Source: Securities Times)