NVC lighting trapped sequelae

Zhaise Lighting, which has been fighting for the suspension of control for 14 months, has recently resumed trading. Unfortunately, after the resumption of trading, investors have been cleared. “Although the turmoil has surfaced on the surface, many problems remain unsolved. Whether Wu Changjiang’s deficiencies in the emptiness can be recovered or the Wujiang Yangtze detachment that had been evicted three times will return to the turmoil of rejuvenation, and whether the new business transformation will be successful or not Changes in the lighting industry, and so on, will all become unknown to NVC Lighting,” said a researcher from a private equity agency in Hong Kong who explained investor concerns.

Being greeted by investors

The above-mentioned researchers observed that since the resumption of trading, there has been a round of liquidation from institutional investors.

As of the close of November 4, the stock price fell from the highest price of HK$1.26 on the day of resumption on October 26 to HK$0.99.

"Investors are not optimistic about NVC's prospects. The resumption of the game lasted more than a year, but there are many problems," the researcher suggested.

Since the suspension of trading at the beginning of August last year, NVC Lighting has experienced numerous disturbances. Wu Changjiang, the founder and chairman of the company, was arrested for alleged misappropriation of funds and was investigated. Difficult out of Wu Changjiang has been in prison since then. Hao Runda and NVC Lighting Chairman Wang Donglei have full power.

Under the authority of Wang Donglei, NVC Lighting actively carried out business rehabilitation work on the one hand and on the other hand actively sought for resumption of trading. Earlier, NVC Lighting repeatedly responded to deadlines for resumption of work, saying that it will fight for this year's April and the third quarter of this year. The final delay until the end of October before the official resumption of trading.

The reporter called NVC Lighting's investor relations department. One person pointed out that before the resumption of trading, many complex investigations were required, including internal independent investigation committees and external investigations and auditing materials. These tasks required time and energy.

Prior to the announcement of resumption of trading, NVC Lighting stated that all resumption conditions have been met, including the handling of non-compliance, notification of all relevant information to the market, development of appropriate financial reporting procedures, and internal control systems.

“The impact of Wu’s on the company has continued to this day.” A management personage of NVC Lighting revealed to reporters. “A very important part of the preparation for resumption of trading is to clarify the relationship with Wu’s and to protect it as much as possible through 'going to Wu’. The company's credit."

In July of this year, NVC Lighting released the investigation results of Wu Changjiang, former chairman of the company, suspected of misappropriating company funds and arbitrarily pledging the company's name in the name of the company, showing that Wu Changjiang had entered into 14 pledge agreements on behalf of the company. The total amount was about 640 million yuan. And extracted 550 million yuan.

NARI Lighting's external resumption conditions stated that the capital freeze and withdrawal required to deal with the prior pledges, security agreements, and license agreements entered into by Wu Changjiang with third parties were all categorized as “non-compliance” and claimed that they had been removed. Wu Changjiang and his wife in various positions, the company no longer responsible for this and Wu's legal proceedings.

The above management pointed out that Wu Changjiang’s previous capital operations may have brought potential credit risks to NVC Lighting, including the company’s provision of 285 million yuan in provision for 14 pledges and security agreements in 2014, and Wu Changjiang and the third party to recover any money, there will be about 266 million in losses, in addition if the CCB claim wins, will have to bear about 60 million yuan and interest losses. However, at the beginning of this year, NVC Lighting’s Vice President and Chief Financial Officer Tan Ying told shareholders that the company will recover the more than RMB 600 million in losses that it Get back.

These are all foreshadowed by NVC Lighting's failure to obtain investor approval.

In addition, several investing organizations interviewed questioned the helm of Wang Donglei, the helm leader, expressing his determination to increase NVC Lighting's determination, but he had no time to question the move, arguing that this was a sign of unwillingness to increase confidence for NVC lighting investors.

During the suspension of the lighting and business reorganization of NVC, Wang Donglei once told the media that “Neishi consumption has passed and the situation is completely stable now”, and therefore he affirmed the intention to continue to increase the capacity of NVC to privatize NVC Lighting. From the day of the main mine, we hope to increase the share of NVC.

An insider of a large investment institution that has related capital cooperation with NVC Lighting pointed out that NVC Lighting's share price is lower after resumption of trading, and it is expected that it will still carry out a relatively long period of adjustment, and the interaction between BDO Runda and NVC Lighting. Integration is not the right time. At the end of last year, BDO Runda had planned to sell NVC Lighting all its operating assets and liabilities related to the LED lighting business. NVC Lighting will pay all of the consideration in cash. However, BDO Runda terminated this integration in November and it has not yet been put on the agenda.

**Sequelae

In addition to the turmoil at the capital level, NVC lighting has cast a shadow on the low share price. The troubles caused by the company's internal business during the suspension period are another source of investor support.

“NVC was in a loss overall last year. It was the first time in four years since the listing that a loss occurred. However, management is overly optimistic about this year's improvement in loss forecast because the loss will continue.” The insider of the aforementioned large investment institution said.

The company’s announcement shows that NVC Lighting’s revenue in 2014 was 3.471 billion yuan, down 8.0% year-on-year; gross profit was 742 million yuan, down 7.0% year-on-year; loss before tax was 315 million yuan, down 188.8% year-on-year; loss attributable to owners of parent company 3.54. Billion yuan, a year-on-year decrease of 244.6%.

In response, Wang Donglei once said that due to the company's large-scale accrual of Wu Zechang’s misappropriation of NVC lighting, and the company’s operations were in a semi-stagnant state in the second half of the year, resulting in a loss in 2014. For the 2015 results, Wang Donglei is expected to exceed 2013.

However, contrary to expectations, NVC Lighting's performance in the first half of this year was not as expected. The semi-annual report showed that the company achieved revenue of 1.772 billion yuan in the first half of the year, which was basically the same as the previous year; the gross profit was 380 million yuan, a slight decrease of 0.2% year-on-year. The profit attributable to owners of the parent company was 17.07 million yuan, a sharp decline from the 58.04 million yuan in the same period of last year.

At this time, Wang Donglei is leading NVC Lighting to tap the household lighting market as a new profit growth point. According to NVC's plan, the gross margin of household lighting is as high as 30%, which will make up for the weakness of traditional lighting products.

However, this transformation is not easy. As of the end of June this year, mid-range and overseas revenues from the NVC brand have all achieved single-digit declines. Wang Donglei pointed out that this is due to the slowdown in economic growth in the Mainland and the weakening of the property market. This trend is expected to continue to deteriorate, and sales of traditional lighting products are bound to decline.

There are lighting industry insiders pointed out that the Guangdong LED industry is suffering from insufficient domestic demand, foreign trade recession, the "cold wave" effect, and NVC Lighting's operating income is affected by the "**", the spirit has not been restored, "Wu Changjiang NVC lighting The impact of lighting products is in-depth, and it still faces reorganization within a certain period of time. The BDO Runda is mainly engaged in midstream products, NVC Lighting is mainly responsible for the downstream, and it is still necessary for Wang Donglei's team to take some time to explore the potential advantages of NVC Lighting.

A capital market person who contacted Wu Changjiang revealed to this reporter that Wu Changjiang, who was in prison, was not discouraged because he and his wife had already divorced and transferred assets before the arrest and other incidents. Wu still had some capital operating chips in his hands. It did not abandon the "vengeance" operation against NVC Lighting and plotted to reorganize Wu's industry.