Two directors voted against, net assets fell into negative territory, and net profit losses intensified, which is the epitome of *ST King Kong's (300064.SZ) three quarterly reports.
On the evening of the 25th, *ST King Kong also made a partial reply to the letter of concern issued by the Shenzhen Stock Exchange. However, as for whether the control of the listed company is changed as highlighted in the letter of concern, *ST King Kong "selectively" avoids talking about it; in addition, there is still no substantive progress in the election of the board of directors involving whether state-owned shareholders can be elected.
As of the end of the third quarter, the balance of funds occupied by *ST King Kong was 305 million yuan. Previously, the company had said: "The actual controller of the company has promised to raise funds through various means before November 2, 2021, and return the above-mentioned funds occupied by the listed company as soon as possible".
At present, only one week before the date of Guo Liuxi's promise, can the original promise still be fulfilled?
Two directors voted against, *ST King Kong or three consecutive years of negative net worth
On the evening of October 25, *ST King Kong disclosed that the third quarter report showed that the performance loss in the first three quarters intensified, with a net profit loss attributable to the mother of 596 million yuan, a year-on-year decline of 24.02%; the net profit loss attributable to the mother after deducting non-deduction was 276 million yuan, a year-on-year decline of 15.62%. As of the close of trading on the 26th, *ST King Kong's stock price closed at 1.81 yuan, with a total market value of 2.2 billion.
From a fundamental point of view, *ST King Kong no longer has the ability to continue to operate. As of the end of the third quarter, the company's net profit margin on sales was -106.47%; the asset-liability ratio reached 101.7%, insolvent; and the net assets have fallen to negative at -112 million yuan, compared with 484 million yuan in the same period last year, a sharp decline of 123.14% year-on-year.
According to the "Prior Notice of Administrative Penalties and Market Prohibition" previously issued by the CSRC, *ST King Kong's retrospectively adjusted net assets on December 31, 2019 and December 31, 2020 may be negative, and if the company's net assets are still negative as of December 31, 2021, *ST King Kong will have negative net assets for three consecutive years, and the company's shares may be subject to major illegal forced delisting.
*ST King Kong said that the company is verifying the facts and financial data of the suspected violation of the "Notice", and whether the company has adjusted the financial statements of the previous year is not based on the "Notice", and the final result is subject to the official decision issued by the Csrc.
At the same time, Wang Daping and Liu Miao, directors of *ST King Kong, both gave objections, saying that they could not guarantee the truthfulness, accuracy and completeness of the third quarter report. The main reasons for the opposition are that the company and the actual controller maliciously obstruct henan agricultural investment financial holdings and Shanghai Xinghan Capital from exercising shareholder rights, and the corporate governance is seriously out of norms.
On the other hand, as of the end of the third quarter, *ST King Kong was involved in a number of litigation/arbitration cases, with a total amount of more than 5 billion yuan; the balance of funds involved was 305 million yuan.
*ST King Kong said in the announcement (II) of the reply to the inquiry letter of the semi-annual report that the progress of the disposal of assets in the company's relevant asset ownership obstacles was less than expected, and the return of the capital occupation combined with the financial status of Henan Huajing and Guo Liuxi, the return of the capital occupation was uncertain.
Perhaps for the return of capital occupation, on the 25th, *ST King Kong also issued a proposal on applying for a comprehensive credit line from financial institutions, and the company and its subsidiaries intend to apply for a comprehensive credit line from banks and other financial institutions for a total amount of no more than 145 million yuan.
It is also worth mentioning that the first financial reporter noted that the Alibaba auction website platform shows that 100% of the equity of Shangqiu Huajing Diamond Co., Ltd. (hereinafter referred to as "Shangqiu Huajing"), a holding subsidiary of *ST King Kong, will be publicly auctioned on November 29, with a starting price of 22.363 million yuan.
Whose *ST King Kong? Pending
On the evening of the 25th, *ST King Kong disclosed 10 announcements, including the third quarter report, the reply announcement on the letter of concern (I), and the reply to the inquiry letter on the 2021 semi-annual report (II).
Compared with the continuous decline in the performance of *ST King Kong, the market is more concerned about the change of control of the company, which is directly related to whether state-owned shareholders can obtain control of the listed company through the election of the board of directors, so as to achieve risk mitigation.
In the reply to the letter of concern, *ST King Kong did not reply to whether the company's controlling shareholder and actual controller had changed, and whether the company's control was stable, only saying that "the company strives to complete the reply as soon as possible and fulfill the information disclosure obligation in a timely manner".
The shenzhen stock exchange's letter of concern pointed out whether the control of *ST King Kong is stable is due to the decline in the shareholding ratio of the controlling shareholder. According to the previous announcement, the 94.4 million shares delivered by Henan Huajing Superhard Materials Co., Ltd. (hereinafter referred to as "Henan Huajing"), the controlling shareholder of *ST King Kong, to Shanxi Securities Co., Ltd. (hereinafter referred to as "Shanxi Securities") have been transferred on October 18.
After the above-mentioned change of rights and interests, Henan Huajing and its co-actor Guo Liuxi held a total of 236 million shares in the company, and the proportion of shares held in the company's total share capital fell to 19.58%, less than 20%.
As of the end of the third quarter, the state-owned shareholder Xinghan Asset Management - Xingkaiyuan No. 8 Single Customer Special Asset Management Plan (hereinafter referred to as "Xinghan Asset Management") held 322 million shares of *ST King Kong, with a shareholding ratio of 26.7%, making it the largest shareholder.
The financial report shows that as of September 30, the controlling shareholders and actual controllers of *ST King Kong are still Henan Huajing and Guo Liuxi, respectively. Since the decline in the proportion of shares held by Henan Huajing occurred in October, according to the shareholding ratio, the actual control of *ST King Kong may have changed.
In addition, among the top ten shareholders of ST King Kong, Henan Agricultural Investment Financial Holdings holds 7.42% of the shares, and The Bank of Zhengzhou holds 7.83% of the shares. The total shareholding ratio of the above three state-owned background shareholders has exceeded 40%, exceeding the total shareholding ratio of Henan Huajing and its co-actor Guo Liuxi by 19.58%.
The change of controlling shareholder and actual control of a listed company needs to be implemented through the election of the board of directors. *The delay in the election of st. King Kong's board of directors means that state-owned shareholders cannot formally enter the ownership and carry out risk mitigation.
CbN published in September and October, "Exclusive | * ST King Kong Fraud Was Severely Punished, State-owned Shareholders Reported the Actual Controller's "Hollowing Out" Behavior Still Has Not Been Closed", "Delayed Disclosure Attracts Regulatory Attention, Guo Liuxi's Control of *ST King Kong's Days Have Come to an End? "Two reports pointed out: Since the beginning of this year, because Guo Liuxi also concurrently serves as the secretary of the board of directors of *ST King Kong, when other shareholders plan to independently convene a shareholders' meeting to implement the re-election of the board of directors and the board of supervisors whose term of office has expired, Guo Liuxi refused to issue relevant announcements, refused to hold a shareholders' meeting and did not conduct a re-election, resulting in the re-election of the company's board of directors has not been fruitful.
As of now, *ST King Kong has not issued any announcement related to the election of the board of directors. At the same time, the fourth board of directors and the board of supervisors of *ST King Kong have been elected for three years since July 4, 2017, and have exceeded one year.
The letter of concern also asked *ST King Kong to explain the progress of the election of the company's board of directors and board of supervisors so far, and the specific work and time arrangement of related matters.
In this regard, *ST King Kong said in the reply letter that the company's major shareholders have not yet formed a consensus and plan, and the current change in the company's equity structure does not rule out the possibility of continued changes, to be negotiated by the major shareholders, to be formed, issued a clear fair, just and beneficial to the company's development of the election plan, the company will actively promote the nomination of candidates for the next board of directors, the board of supervisors and strive to implement the election as soon as possible.
*ST King Kong is a typical negative case in the A-share market in recent years, that is, the actual controller Guo Liuxi illegally occupied the funds of the listed company, resulting in the company's insolvency and loss of the ability to continue to operate.
Previously, the CSRC proposed to warn Guo Liuxi and impose a fine of 15 million yuan, while imposing a lifetime market ban on him.
As a local listed company in Henan Province, 3 years ago, a number of shareholders bailed out *ST King Kong in order to help deal with risks.