Concentration Technology: "Foam" Breaks through Stock Price Plunges

Concentration Technology: "Foam" bursts through the stock market. Concentrating technology with a "Deluxe Edition" promoter lineup landed on the GEM on April 15 this year. As early as 2007, Concentration Technology has been seeking overseas listing, but two years later it suddenly turned to the GEM, the issue price set at 20 yuan / share. For this price, one researcher said with emotion: “The company’s net asset per share is only 1.36 yuan, but it has a total market value of 8.4 billion yuan when it is listed. This bubble is too big.”

Equity Transfer Becomes "Huan Back War"

In March 2002, the actual controllers of Concentrate Technology, Wang Jian, Yao Naxin, Zhu Min, and YUEN KONG jointly established the FPI (US) in the United States. It is worth mentioning that Zhu Min was once hailed by Forbes as the best investor in the country. It was under the guidance of Zhu Min that the sponsors of Concentration Technology had become increasingly strong. At present, Zhu Min and its affiliates' controlled Hong Kong Rich Profit, Shaoxing Longshan Race Bole, and Hangzhou Lingfeng Saible are holding 16.45%, 1.61%, and 1.61% shares of Convergence Technology before the issue.

In order to prepare for overseas listing, since December 2007, Congshu Technology’s shareholdings have become more frequent. On December 20, 2007, FPI (US) transferred its 100% stake in the company to Hong Kong Rich with 10 million US dollars. On April 2, 2008, the promoter, Wang Jian, transferred the shares held by him to its own shell company FOCUSED EQUIPMENT LIMITED with a conversion price of US$0.001 per share; another promoter, Yao Naxin, transferred 885 million shares it held to the control of the stock. Shell company BRIGHT GAIN GROUP LIMITED, the conversion price of 0.001 US dollars per share.

After determining the domestic listing, the ownership of Concentrated Technology has changed again. In October 2009, Hong Kong Fuying and Zhejiang Ruiyang Science and Technology Co., Ltd. and other 14 institutions signed an equity transfer agreement, agreeing to transfer 81.71% of the limited-quantity stock held by the company at the price of registered capital. "This complicated and complicated transfer of equity is dazzling. The key to the interests of the parties is that only the parties can understand clearly." An investor in Nanjing shouted "long-term knowledge".

Bringing a huge "bubble" listing "Before the issuance, the company's net assets per share were only 1.36 yuan, and the annual profit was less than 200 million yuan, but it had a total market value of 8.4 billion yuan." A securities firm researcher bluntly said, "As a listed company on the GEM, The high price of optical technology has created a huge bubble."

However, due to the "green, high-tech" top of the head, Concentration Technology still landed on the GEM listing on April 15. However, the bubble was a bubble in the end. After the listing, Concentration Technology's stocks plummeted for 10 consecutive trading days, and the stock price “swept away” (from 24.80 yuan/share to 16.76 yuan/share). This makes the purchase of concentrating technology institutions and retail investors chilling.

In addition, the above-mentioned researchers still have concerns: “From a fundamental perspective, Concentration Technology has a quarter of its business to represent foreign products. The company in the industry needs to face a bunch of foreign companies such as Siemens, ABB, and Thermo There are competitions between Fisher Scientific, American Hash Company, Shimadzu Corporation, and the local Yuxing Technology Development (Shenzhen) Co., Ltd. The profit rate of the industry is showing a downward trend.

Non-operating income "has meritorious power"

In fact, subsidies and tax incentives have always been the main contributors to Concentrated's performance. In 2007, Concentrated Technology's main business suffered losses and ultimately relied on financial subsidies and VAT refunds to recoup its performance. In the following years, the company’s subsidy tax benefits accounted for almost half of the performance.

According to statistics, in 2008 Concentrated Technology's total profit was 87 million yuan, of which 37 million yuan was non-operating income, which constituted 27 million VAT rebates and 10 million government grants; total profit in 2009 was 150 million yuan, of which 44 million yuan. For non-operating income, it is mainly composed of 29 million VAT refunds and 9 million government subsidies. In the first half of 2010, the total profit was 35 million yuan, and 16 million yuan was non-operating income. The main component was still VAT refunds and government subsidies.

In addition, Congguang Technology's subsidiary received an income tax deduction for its foreign-capital status: from 2007 to January to June 2010, subsidiaries were deducted by income tax of 5 million yuan, 12 million yuan, 14 million yuan and 3.2 million yuan respectively. According to calculations, from 2007 to January to June 2010, the proportion of corporate tax incentives to net profit was 142%, 46%, 31%, and 43%, respectively.

It is worth mentioning that Concentration Technology achieved a net profit of RMB 9.01 million in 2007, but by 2009, its net profit soared to RMB 132 million. The huge disparity in profits during the two years exposed the company's business risks. According to the Concentrated Technology prospectus, the proportion of raw material costs in the company's leading products to product costs is approximately 80%-90%. If the fluctuation in raw material prices is too great, it will affect the company's overall profitability.