A "Advance Notice of Administrative Punishment" announced the landing of the insider trading case of LONGi and Li Chunan. Or worried that Li Chunan, one of the core figures of LONGi, will be punished, which will affect the company's already depressed stock price, Zhong Baoshen, chairman of LONGi Green Energy, quickly announced the date of increasing his holdings.
The person acting in concert on the front foot was punished by the regulator for leaking inside information, and Zhong Baoshen, the chairman of the board of directors of the back foot, announced the immediate implementation of 1--1500 million increase plan.
On January 29, LONGi Green Energy announced that the company received a notice from Li Chunan, one of the controlling shareholders, that Li Chunan received the "Prior Notice of Administrative Punishment" issued by the Liaoning Securities Regulatory Bureau on January 29, 2024, and imposed a fine of 500,000 yuan on Li Chunan.
Or worried that LONGi Green Energy, which was already in a downturn in the photovoltaic "winter", will be hit again, Li Chunan's "old partner" Zhong Baoshen decided to take action. It is reported that on the same day, Zhong Baoshen, chairman of LONGi Green Energy, informed the company that it planned to implement its previously announced shareholding increase plan for the first time on January 30.
Judging from the performance of LONGi Green Energy in the secondary market on January 30, this increase in holdings has been quite effective. According to the data, as of January 30, 2024**, although LONGi Green Energy is small**, compared with the photovoltaic sector, the decline has narrowed significantly. It is reported that on January 30, the wind photovoltaic index fell by more than 3%.
Li Chunan leaked inside information to a close friend
In fact, as early as August 2022, the China Securities Regulatory Commission (CSRC) filed a case alleging that Li Chunan, the controlling shareholder of LONGi Green Energy, was suspected of leaking inside information.
According to the announcement, Li Mouhong, chairman of Shenzhen Shijin Technology Co., Ltd. (hereinafter referred to as "Shijin Technology"), introduced Shijin Technology Company to Li Chunan, chairman of Dalian Liancheng CNC Machinery Co., Ltd. (hereinafter referred to as "Liancheng CNC"), in August 2019 and asked Liancheng CNC about its intention to invest in Shijin Technology, but Li Chunan had no clear opinion at that time.
On June 2, 2020, Li Mouhong once again sent a proposed cooperation plan to Li Chunan, and the two parties initially formed a motion for Liancheng CNC to participate in the private placement of Shijin Technology, and then Li Chunan gave Zhao Mouping the relevant chat records with Li Mouhong. Zhao Mouping traded "Shijin Technology" during the sensitive period of inside information.
The Liaoning Securities Regulatory Bureau believes that the private placement of Shijin Technology is a major matter stipulated in Item 9, Paragraph 2 of Article 80 of the ** Law of the People's Republic of China (hereinafter referred to as the "* Law"), and before it is disclosed, it belongs to the inside information stipulated in the second paragraph of Article 52 of the ** Law. The inside information was formed no later than June 2, 2020, and was disclosed on October 29, 2020, the announcement date of Shijin Technology's disclosure of the private placement**.
Li Chunan, as the chairman of Liancheng CNC, the target of Shijin Technology's private placement, is an insider of inside information in accordance with regulations, and leaked inside information to Zhao Nengping before the inside information was made public, which is suspected of violating relevant regulations and constitutes leaking inside information.
Li Chunan and Zhao Nengping have a close relationship, and the two jointly hold shares in the three-board company LONGi Electromagnetic, and Zhao Nengping holds 2278%, and Li Chunan holds 1712%。
LONGi Green Energy said that Li Chunan is not the actual controller, controlling shareholder and major shareholder of the company, but the person acting in concert with Li Zhenguo and Li Xiyan, the actual controllers and controlling shareholders of the company. The above-mentioned administrative penalties will not have an impact on the actual control of the company.
But it is undeniable that Li Chunan and LONGi Green Energy are closely related. On December 20, 2020, LONGi announced that it had received a notice from Li Chunan, a shareholder holding more than 5% of the shares, that he signed the Share Transfer Agreement with Hillhouse on December 19, 2020.
After the completion of the transfer, Li Chunan and his controlling shareholders Li Zhenguo and Li Xiyan, the controlling shareholders of the company, held about 86.7 billion shares, accounting for 22 percent of the total share capital99%；Hillhouse Capital holds about 22.6 billion shares, accounting for 6% of the total share capital.
The market generally believes that Li Chunan's move is to complete the "cutting" of equity with LONGi and clear the way for him to take the helm of Liancheng CNC transfer board listing.
The chairman increased his holdings in "firefighting".
For LONGi Green Energy, it is acceptable for LONGi to be fined for insider trading, but what worries it is even more is the long-term sluggish performance in the secondary market.
Judging from the data on the day of the two announcements, LONGi Green Energy closed at 204 yuan shares, the stock price fell by 71%, a one-day decline hit a new low in nearly 16 months. The photovoltaic sector has also been slow to improve, falling 5 on the same day8%。
Or out of the consideration of stabilizing the "military spirit", Zhong Baoshen chose to start the previously announced increase plan.
It is reported that in October 2023, LONGi Green Energy announced that Zhong Baoshen, chairman of the company, plans to increase his holdings of the company's shares in the manner allowed by the Shanghai ** Exchange system within 12 months from October 31, 2023, with an increase of no less than 100 million yuan and no more than 1500 million yuan.
This move is based on its confidence in the company's future sustainable and stable development and recognition of long-term investment value, in order to safeguard the interests of shareholders and enhance investor confidence.
Such a positive signal of overweight has not changed the status quo of the company's stock price. Choice data shows that since November 1, 2023, LONGi Green Energy has fallen by 16.16%。
On the evening of January 29, LONGi Green Energy said that the company received a notice from Zhong Baoshen on the same day that it intends to implement the first increase in holdings on January 30, 2024, and will continue to implement the increase in holdings according to the above shareholding increase plan.
It is worth noting that Zhong Baoshen and Li Chunan have a deep personal relationship. It is reported that Zhong Baoshen, Li Chunan and Li Zhenguo, the actual controller of LONGi Green Energy, are all college classmates. Legend has it that in 1986, a group of students were moved by the deeds and spirit of the old principal Jiang Longji when they were in school, and they agreed to the statue of the principal that they would go out to do business in the future, and they would name it "Longji".
In addition, Li Wenxue and Chen Hong of LONGi Leye; Zhang Changjiang of Xi'an LONGi; Zhang Chengchen and Zhao Nengping of Shenyang Longi; Zhao Sihai of Ningxia LONGi is also an alumnus of the Department of Physics of Lanzhou University in 1986.
Caught in a PV dilemma
The data shows that the A-share photovoltaic sector will perform poorly throughout 2023, and on the whole, it will rise less and fall more. Among them, there are more than 80 photovoltaic concept stocks**, of which more than 60** have fallen by more than 20%, 19** have fallen by more than 40%, and 11** have fallen by more than 50%.
In fact, for a long time before, the photovoltaic sector has been regarded by many investors as the best track due to its high certainty, and even one of the sectors with the most gains in 2020.
The resulting high valuation coupled with overcapacity is the current problem faced by the photovoltaic industry, Zhong Baoshen has said that in the past two years, the photovoltaic industry has attracted a lot of capital due to its bright prospects, resulting in overinvestment.
The high degree of "involution" has also led to an accelerated decline in the cost of the photovoltaic industry chain. LONGi disclosed in the exchange minutes that the company's photovoltaic modules** have dropped to less than 1 yuan by the end of 2023, a decrease of about 48% during the year.
It is worth noting that the cost of the photovoltaic industry chain, especially the photovoltaic module, has approached the cost of the lowest-cost photovoltaic integrated manufacturer, and the market expects that the possibility of the module will continue to decline sharply is getting smaller and smaller.
It is also the contradiction between the rapid expansion of the supply side of the photovoltaic industry and the steady growth of demand that makes the stock price of the track deviate from the fundamentals.
Taking LONGi Green Energy as an example, it has hit an all-time high of 73 since November 2021After 6 yuan of shares, LONGi's share price fell endlessly. As of January 30, 2024**, LONGi Green Energy reported 2023 yuan shares, down 083%。
From the perspective of performance, LONGi Green Energy is still under pressure, although in the first three quarters of 2023, LONGi Green Energy achieved operating income of 9410 billion yuan, a year-on-year increase of 855%；The net profit was 1169.4 billion yuan, a year-on-year increase of 654%。
But looking at a single quarter, the company achieved an operating income of 2944.8 billion yuan, down 1892%；Net profit in the third quarter was 251.5 billion yuan, a year-on-year decrease of 4405%。
LONGi Green Energy also said in a recently disclosed announcement that from the fourth quarter of 2023 to the present, the first level of the photovoltaic industry chain has fallen to a very irrational position, based on such a high level, it is difficult for photovoltaic companies to achieve profitability, which is not conducive to the long-term healthy development of the photovoltaic industry.
But on the other hand, this year's market oversupply pressure is greater, if the industrial chain continues to run at a low level, then the financial situation is fragile, the technology is not advanced enterprises may be forced to stop production or withdraw, then the actual supply and demand of the industry continues to tend to balance, the industrial chain or will return to rationality.
However, judging from the performance of the secondary market, Zhong Baoshen's increase in holdings has played a certain effect, but in the long run, the company's virtuous cycle still needs to be supported by brilliant performance.