AutoBeta(AutoBeta.net)09/24 Report--

A few days ago, ST Dawn issued an announcement on the Shanghai Stock Exchange, announcing the whereabouts of the controller, Zhang Xiugen. "verified with controlling shareholder Huatai Motor, on July 5, 2022, Zhang Xiugen, the actual controller of the company, was detained by the Tianjin Binhai New area Public Security Bureau on suspicion of" illegally transferring and reselling land use rights, "ST said in an announcement." on August 10, 2022, he was arrested for the above-mentioned transfer of land use rights. "

On September 19th, Huatai Automobile replied to ST dawning that the actual controller, Zhang Xiugen, was not in good health and the company was trying to contact and verify with his family, but the letter did not reveal the reason for Zhang Xiugen's disappearance, and the Shanghai Stock Exchange again issued a supervision letter to ST dawning. On the same day, Shenzhen Zhongneng Green Qihang No.1 Investment Enterprise (Limited Partnership), the second shareholder of ST, reported to the Shanghai Stock Exchange that Zhang Xiugen had been arrested by the public security organs on August 10 on suspicion of fraud. On September 20th, ST Dawn issued an announcement confirming Zhang Xiugen's arrest.

According to Chinese law, the police must notify the family of Zhang Xiugen after detaining the suspect, which means that Zhang Xiugen's family and Huatai Automobile Group Co., Ltd. should have been informed of this information after July 5. ST dawning is supposed to know this information in July, but it is unlikely to know Zhang Xiugen's whereabouts until September 13. Of course, there is another possibility that the family of the controller and Huatai Motor refused to disclose Zhang Xiugen's missing information to ST dawning.

Data show that Liaoning Shuguang Automobile Group Co., Ltd. (hereinafter referred to as "dawning") was established on December 11, 1995, with two famous brand products: "Huanghai Automobile" and "dawning axle". It is the only enterprise in China that has the core technology of "hybrid gearbox" and completely independent intellectual property rights, with the core technology of "three electricity", independent intellectual property rights and the core technology of four-wheel drive electric axle. And has two financial licenses of auto finance and financial leasing.

Huatai Automobile Group Co., Ltd. (hereinafter referred to as "Huatai Automobile"), established on December 18, 2000, is an independent brand car company with new energy vehicles, traditional cars and auto parts as its main business. Zhang Xiugen holds a 99% stake in Huatai Automobile, while Huatai Motor holds 19.77% of dawning shares. Zhang Xiugen is not only a controller of Huatai Automobile, but also a controller of dawning shares. Therefore, the loss of Zhang Xiuhei has attracted a lot of attention.

In the early years, Huatai Motors also had a good time. In 2000, Huatai Automobile controller Zhang Xiuwei acquired Shandong Rongcheng Automobile Factory from FAW Group and changed its name to Rongcheng Huatai Automobile Co., Ltd., which was the starting point of Huatai Automobile. In 2005, Huatai Motor reached an agreement with Hyundai Motor of South Korea to win the domestic qualification of "Santa Fe". Huatai Motor quickly became popular in the car circle relying on Hyundai's technology. In the same year, Huatai Automobile won more than 6000 mu of land in Ordos to establish a production base at a price of 60 million yuan. This year, Zhang Xiuhei also appeared on the Forbes China Rich list.

The prosperity of Huatai Motor has undoubtedly relied on the dividend of the rapid development of the domestic automobile market and the endorsement of Korean Hyundai Motor, but since then Huatai Automobile, which does not want to make progress, does not have its own core technology. Hyundai automobile resources are gradually tilted to the joint venture Beijing Hyundai, Huatai Motor is naturally marginalized.

Huatai sold only 71000 vehicles in 2015, up 2.5 per cent to 73000 in 2016 and 81.64 per cent to 133000 in 2017, according to the data. The surge in sales has made Huatai confident. Huatai has publicly announced that it will "strive to sell 200000 cars in 2018 and 500000 in 2020. In the next three years, Huatai has nearly 30 new cars on the market one after another."... However, Huatai car sales fell 9.0 per cent to 120100 in 2018. According to this calculation, Huatai Automobile has sold a total of 398000 cars in four years, with an average annual sales of 99000 vehicles.

However, even such figures are "full of water" in the eyes of the industry. It is reported that Huatai's sales data have been seriously falsified for a long time as early as 2011. At one time, the China Automobile Association did not accept the data reported by Huatai Automobile, but in order to maintain the integrity of the data, it replaced its sales data with "0".

Since 2019, Huatai Automobile has been mired in an operating crisis. Its four vehicle manufacturing bases in Tianjin, Shandong, Inner Mongolia and Liaoning have all stopped production. While defaulting on employees' wages, they also face hundreds of lawsuits with a high debt ratio. In the domestic automobile market, it exists in name only.

On September 27, 2018, dawning Group transferred 14.49% of dawning shares to Huatai Motor and completed the registration procedures for transfer of ownership. After the above equity changes, Huatai Motor directly holds 19.77% of dawning shares. At present, Huatai Automobile holding dawning shares have been fully pledged. According to the heavenly eye investigation, Huatai Automobile was listed as a breach of trust by the Supreme Court 25 times, the relevant consumption restriction order reached 119, and was enforced by the court 13 times for failing to fulfill its legal obligations on time, while Zhang Xiugen himself was also listed by the court as a person who broke his promise.

ST dawning announced on September 4 that 97.895 million shares (14.49 per cent of the total share capital) of ST held by Huatai Motor would be judicially auctioned to pay off debts, and that if the auction was finally completed and the shares were settled, ST dawning's controlling stake could change. However, Huatai Motor does not "recognize" the equity auction and believes that the auction court will take judicial measures for matters such as non-notice and equity value evaluation. According to JD.com 's auction platform, the starting price of Huatai Motor's 97.895 million shares is the average price of the 20 trading days before ST Dawn multiplied by the total number of shares at auction.

In addition to Huatai Motor, all 48.6409 million shares (about 7.2 per cent of the total share capital) of ST dawning held by Shenzhen Zhongneng Green Qihang No.1 Investment Enterprise (Limited Partnership), the second largest shareholder, will also be auctioned from September 29 to September 30, starting at a 30 per cent discount on the average price of the ST dawning transaction 20 trading days before the auction.

Dawning shares in ST were auctioned, and more attention was paid to the winner of the controlling stake.

Dawning's performance is not good. According to the financial report, the net profit of dawning shares from 2017 to 2021 is 316 million yuan,-128 million yuan, 47 million yuan, 55 million yuan and-459 million yuan respectively. Revenue in the first half of 2022 was 857 million yuan, down 39.17% from the same period last year, while the net loss was 105 million yuan, down 3.85% from the same period last year.

Against this background, ST dawning's share price continues to soar. ST dawning shares fell to 3.24 yuan on Aug. 3, and then continued to rise, closing at 8.34 yuan as of Sept. 23, up 149.7%. Shen Meng, executive director of Xiangsong Capital, said that this irrational market may be due to the uncertainty of the loss of the actual controller, which could lead to heavy losses, resulting in hot money deliberately driving up share prices and clearing positions.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat