AutoBeta(AutoBeta.net)09/14 Report--

On the evening of September 13th, Liaoning Shuguang Automobile Group Co., Ltd. (securities referred to as ST dawning) revealed that it was in a state of loss of contact with the actual controller, Mr. Zhang Xiugen. At the same time, the dawn of ST continued to rise, and finally closed with the daily limit, harvesting the 18th trading record of 22 trading days. In view of the fact that the loss of the actual controller of the company has a great impact on investors, the market attention is relatively high and the stock price of the company fluctuates greatly recently, the Shanghai Stock Exchange quickly issued a supervision work letter to ST at dawning that night, requiring the company to make a specific explanation on the relevant situation, including the reasons for the disappearance of the actual controller.

That night, Liaoning Shuguang Automobile Group Co., Ltd. (hereinafter referred to as: the company) issued a "notice about being unable to contact the actual controller", which shows that since mid-August 2022, Liaoning Shuguang Automobile Group Co., Ltd. (referred to as "the company") can not get in touch with the actual controller of the company, but communicate normally with Huatai Automobile Group Co., Ltd., the controlling shareholder. And explain that Zhang Xiugen does not hold a position in the company, nor does he participate in specific production and management activities. However, the above situation may affect the controlling shareholders' shares to be auctioned, and the impact on the auction results is uncertain.

It is understood that from August 12, ST dawning rose sharply and opened the connecting board model, and ST dawning shares rose 105.11% in 22 trading days from August 12 to September 13. A sharp rise in stock prices in a short period of time led to ST dawning frequent stock price volatility announcements and reminders of risks.

According to a message released by the Shanghai Stock Exchange, the Shanghai Stock Exchange has recently focused on monitoring serious abnormal volatility stocks such as ST Dawn, which has large price fluctuations. Since May, ST dawning has received regulatory letters from the Shanghai Stock Exchange almost every month. In response to the stock price situation, the Shanghai Stock Exchange said that the company's share price has risen 105.11% since August 12, 2022, which is significantly higher than the overall market level in the same period. The company is required to conduct a comprehensive self-examination of the buying and selling of stocks by insiders with relevant information to explain whether there is a leakage of information related to the disappearance of Zhang Xiugen.

According to the information obtained from the automotive industry, Huatai Motor mentioned above was once the third largest shareholder of ST dawning, with a stake of 5.28%. On September 27th, 2018, dawning Group transferred 14.49% of ST dawning shares to Huatai Motor, and Huatai Motor directly held 19.77%, becoming the largest shareholder. The aforementioned Zhang Xiugen is the majority shareholder of Huatai Motor, with a 99% stake. Born in 1961, Zhang Xiugen has served as the general manager of Inner Mongolia Xincheng Construction Company, the chairman of Baotou Hengtong Group Co., Ltd., and the chairman of Huatai Automobile Finance Co., Ltd., among which the chairman of Huatai Automobile has attracted the most attention.

Data show that Huatai Automobile was founded on December 18, 2000, founder Zhang Xiugen acquired Shandong Rongcheng Automobile Factory from FAW Group, and later changed its name to Rongcheng Huatai Automobile Co., Ltd. In May 2008, Huatai Automobile entered the automobile industry on a large scale and opened the road of independent car construction after its establishment. As an independent brand car company with new energy vehicles, traditional cars and auto parts as its main business, it has three core production bases in Tianjin, Shandong Rongcheng and Ordos, Inner Mongolia, with a vehicle production capacity of 450000 vehicles. As the earliest car company to launch SUV models in China, the first domestic SUV produced was once known as "the father of domestic SUV". In 2003, Huatai Motor and Hyundai Motor jointly launched Tekala models, and the new cars were all the rage; in 2005, Huatai introduced the classic modern SUV model "Santa Fe" and then put it on the Chinese market in the following year.

From 2015 to 2016, Huatai sold 71200 and 73000 cars, respectively, and by 2017, sales rose 81.64% to 132600, according to the data. The surge in sales has made Huatai full of confidence. At that year's auto show, Huatai set an ambitious goal of selling 200000 vehicles in 2018 and exceeding 500000 in 2020. In terms of product layout, Huatai announced the launch of nearly 30 new cars in the next three years.

Huatai Automobile owns SUV products such as Huatai Santa Fe, Traka, Polige, etc.; Lusheng E70, Lusheng E80, Huatai B11 and other car products as well as pure electric palanquin Huatai new energy iEV230 and pure electric SUV Huatai new energy XEV260 and other new energy vehicles. Huatai Santa Fe C9 and Huatai Traka T9 were listed in 2009; Huatai B11 was launched by Huatai Automobile on December 28, 2010; Huatai B11 was launched at Guangzhou Auto Show on December 21, 2011. the first pure electric SUV Huatai new energy XEV260 in China in June 2016. On November 17, 2017, Huatai officially launched two traditional new cars and four new energy vehicles, a total of six new cars, namely, Santa Fe 7, new Santa Fe 5 (fuel car), Santa Fe 5 EV380, Lusheng S5 EV330, Santa Fe 2 EV180, Lusheng S1 EV160.

Although Huatai Automobile is not slow to launch products and a large number of products, but its development process is not smooth. Dawning Group transferred 5.28% of Liaoning dawning shares to Huatai Motor in 2017, but due to many problems in Huatai Automobile at that time, Huatai Motor did not complete the acquisition of dawning shares until September 27, 2018. However, the acquisition did not bring a good performance for the development of Huatai Automobile. Huatai Motor not only failed to achieve its previously proposed sales target, but was exposed to negative news such as bankruptcy, arrears of wages, departure of R & D personnel, suspension of production base and so on. Data show that Huatai's sales in 2018 were 120700, down 9.0% from a year earlier, a far cry from its announced target of 200000. At the same time, dawning's profits were routed again and again, with a net profit of 316 million yuan in 2017 and a loss of 128 million yuan in 2018. As the problems of automobile production, marketing and operation are plagued by funds, the news of arrears of employees' wages and the payment of distribution suppliers appear one after another in the public view.

In 2019, there was a news that "four car companies filed for bankruptcy to conduct supply chain risk investigation", including Huatai Motors. Huatai Automobile issued an official statement denying the bankruptcy rumors. Huatai Motors said: "affected by the continued decline in the industry, Huatai Motor's operation has been affected, and the company is actively taking measures to reduce risks. At the same time, dawning shares controlled by the company are operating normally." the business is also moving forward in a stable and orderly manner. Since then, Huatai Motor's entire stake in dawning shares has been frozen many times. On October 9, 2019, dawning Co., Ltd. announced that the company learned that the dawning shares held by the major shareholder "Huatai Automobile" had been judicially frozen for a period of 3 years.

On September 5 this year, ST Dawn announced that through JD.com 's auction and the execution of the order by the Intermediate people's Court of Jinzhou City, Liaoning Province, the company's controlling shareholder Huatai Automobile holding 97.895 million of the company's unlimited tradable shares will be auctioned to pay off debts. Unlimited tradable shares will be auctioned to pay off debts.

Huatai Motors expressed strong objection to this equity auction. Huatai Motor believes that the executive judge of the Intermediate people's Court of Jinzhou City, Liaoning Province, neither served any legal documents nor consulted any opinions on the stock value evaluation, and did not notify the value evaluation of its dawning stock holdings. What's more, it did not inform the announcement of the auction, which seriously violated Huatai Motor's legal rights. The executive judge of the Intermediate people's Court of Jinzhou City, Liaoning Province, neither initiated the evaluation procedure for any mortgage guarantee property under Huatai Automobile's effective judgment document, nor conducted a priority auction, but directly carried out an auction of dawning shares, thus harming Huatai Automobile's legitimate rights and interests. Huatai Automobile will start relevant legal procedures to safeguard its own legitimate rights and interests.

However, ST Dawn also stressed in the announcement that the auction is still in the publicity stage, in view of the company's controlling shareholders will take judicial measures on the auction, the auction can be held, there is uncertainty.

According to media reports, Zhang Xiugen was once a regular on various wealth lists, including ranked 137th on China's rich list with a fortune of 13.8 billion in 2018, 1116th on Forbes' global billionaire list in 2019, and 330th on the new Fortune 500 rich list with 14.13 billion yuan in 2021. According to Tianyan check information, Zhang Xiugen holds a 99% stake in Huatai Automobile Group Co., Ltd., but at the same time, he also faces many lawsuits. At present, he is listed by the court as the executor of breach of trust, and high consumption is restricted because related enterprises fail to fulfill their legal obligations. Before that, he was enforced by the court because he failed to fulfill his legal obligations on time.

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