Xingfa Aluminum has performed well in the past two or three days, and it’s stock price has regained its mark of 6 yuan. I wonder if it is related to the company’s official website to disclose the first-quarter operating data great?
Midea Real Estate Holding Ltd. purchase which is listed for half a year, surrendered its first performance after listing last month and achieved excellent results.
Let me talk about the basic situation:
Midea Real Estate was listed in October 2018, with an offer price of 17 yuan. After the listing, the total number of shares issued was 1.109 billion shares. The major shareholder He Jianfeng held 1 billion shares, equivalent to 84% of the shares, and another cornerstone investor Youngor (600177. SH) holds 60.35 million shares or 5.07% of shares and Foshan Yesheng Investment holds 13.71 million or 1.15% of the shares. The cornerstone investors have a six-year lock-up period, and there is no lock-up limit. If the cornerstone investors do not reduce their holdings, then the market circulation is only 9.8%, and the market circulation is only about 2.56 billion yuan.
Xingfa Aluminum (00098)
Xingfa’s performance and dividends are as expected, and they are satisfied. The only dissatisfaction is stock price performance.
Revenue increased by 37% to nearly RMB 10 billion, and gross profit increased by 33% to RMB 1.35 billion. The overall gross profit margin decreased slightly by 0.4% to 13.6%, mainly due to the 2% decrease in the gross profit margin of construction aluminum profiles. By maintaining existing customers and attracting new customers, the processing costs were reduced, and the revenue of this business segment increased by 32%, and the price reduction achieved the expected results.
Feng’s frankly stated that the number of shares he accepted for scrip dividends would not increase his holdings by more than 1.99% of the “enlarged share capital,” thus avoiding the potential mandatory offer obligations, and therefore the minority shareholders if they choose to scrip dividends. There will be no offer to protect the reserve price. To make a major change, it is estimated that the key reason is that the CSRC asked Feng to make a clear disclosure on the stock dividend interest intention on March 14. It is not ambiguous. It will not be announced until March 28 after the stock scrip dividend plan is closed. Therefore, if Feng said on March 14 that he would break the dividends in full, it is believed that most of the minority shareholders feel that they will follow the stock exchange scrips because of the potential offer relationship. A result is a large number of new shares. The net asset value per share was significantly diluted, but Feng could not achieve the goal of increasing the shareholding of the shares. It would be better to announce that it would not increase its holdings by more than 1.99% of the enlarged shareholders, so that the minority shareholders would not follow suit.
The performance of Lifestyle China Group Ltd. for 2018 can be summed up in four words: “but not lost”. Excluding foreign exchange gains/loss factors, earnings increased by approximately 10%. The source of growth was attributable to the increase in profit of associates and its business was slightly retrogressive.
I saw a lot of people inquiring about the reasons for buying a brand of profitable brands. Therefore, I will briefly talk about the detailed analysis. I will wait until the net is removed in March, because the length will be slightly longer.
The reason why I bought the target is very simple. It is only for the “incidents” that may occur. I am not gambling on the reversal of my performance. I do not believe that the business of the target can be reversed in the next one or two years. Therefore, the purchase of the target is pure. It is an event-driven event that may occur. The main reason for the trigger event is that the company announced a special interest of 0.28 yuan per share, which can be used to scrip dividends, while the major shareholder has disclosed the intention to choose to use the stock to scrip. Assume that most of the minority shareholders will choose cash dividends. If only the majority shareholder chooses to scrip dividends, then the current shareholder will calculate the dividends of up to 810 million yuan, which will be converted into shares at a price of about 9 cents per share. After the completion of the scrip dividend, the major shareholder can exchange about 9 billion new shares, and its shareholding will be greatly increased from the original 33.88% to nearly 68%!