Foshan Lighting: Halo retreats to guard against the four major risks

On July 6, 2012, Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as "Foshan Lighting", stock code: 000541) announced that the company received the "Decision on Administrative Supervision Measures" from the Guangdong Securities Regulatory Bureau, saying that the company's 2009 annual report, 2010 The annual and annual reports, the 2011 interim report and the annual report were not disclosed with Foshan Schnoqi California Electric Co., Ltd. (hereinafter referred to as "Snook"), Foshan Slangbo Enterprise Co., Ltd. (hereinafter referred to as "Slangber") Relationships and related transactions. At the same time, the company has not disclosed the relationship with Hong Kong Qinghai Skyline Rare Element Technology Development Co., Ltd., and the related transactions with Qinghai Folu Lithium Energy Development Co., Ltd.

In addition, the Guangdong Securities Regulatory Bureau issued a “Decision on the Procedures for Publicly Explaining Measures to Zhong Xincai” to Foshan Lighting, and criticized the chairman of the board, Zhong Xincai, and asked him to explain the concealment of related party transactions.

Foshan Lighting said that the company did make a mistake in the related transaction, but the specific circumstances of the related transactions involved in the violation were not explained. There is no response to the speculation of the "interest transfer" of the outside world.

The monitoring shows that Foshan Lighting's main electric light source products enjoy the reputation of “China Light King” in the domestic and foreign markets, and it is a large-scale backbone enterprise of electric light source in China. On November 23, 1993, it landed on the A-share of the Shenzhen Stock Exchange. Osram Holdings Co., Ltd. (hereinafter referred to as “Osram”) held 13.47% of the shares and was the company's largest shareholder. Youchang Lighting Equipment Co., Ltd. held 10.5%, the company's second share. Major shareholder.

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Recently, Foshan Lighting, which has been hailed as a “cash cow” for many years of high dividend payback investors, can be described as an eventful year. The related transactions are in violation of regulations, and the company’s management and major shareholders are openly fighting and entering the new energy field. The stock price fell, and many negative information exposed various risks hidden in the company.

One of the risks: legal risk
According to media reports, Snooker and Slangbo belonged to Zhong Yongliang, the eldest son of Foshan Lighting, and the second son, Zhong Yonghui. However, in the recent three-year report of Foshan Lighting, there is no mention of the names of the two companies, Schnoch and Slambo, and the information on the related transactions of the two companies is not disclosed.

According to the data, Foshan Lighting has frequently violated regulations in recent years: In July 2008, the Guangdong Securities Regulatory Bureau requested Foshan Lighting to rectify corporate governance and information disclosure. In 2010, the Guangdong Securities Regulatory Bureau issued two letters to Foshan Lighting for information disclosure. The work and related party transaction management system was rectified; the Shenzhen Stock Exchange also issued a letter of concern to Foshan Lighting for three consecutive times in 2010, asking for information on the investment in lithium battery projects and checking for suspected insider trading or leaking information.

Analysts believe that the truthfulness, completeness and timeliness of information disclosure are the most basic laws and regulations that listed companies should abide by. Foshan Lighting can be described as repeated mistakes, and it is not only reported to a number of companies and related transactions. Serious violations of the relevant laws and regulations on information disclosure, and the related transactions involved are likely to have illegal activities such as the transfer of interests. If the above-mentioned related transactions are verified to be illegal, it will be more than simply supplementary disclosure and public explanation. It will be the regulatory body. Severe punishment measures.

Risk 2: Corporate Governance Risk
According to the data, the current chairman of the company, Zhong Xincai, is the entrepreneurial veteran of Foshan Lighting, and has been in charge of the company for 20 years. In August 2004, Foshan SASAC's former largest shareholder Foshan SASAC transferred 13.47% of its 23.97% stake to OSRAM Yuchang Holdings, a joint venture between Osram and Zhuang Jianyi (Osram holds 60.14% stake in the company, Zhuang The perseveringly controlled Hong Kong Prosperity holds an additional 39.86% stake) and transfers the remaining 10.50% equity to Hong Kong Prosperity controlled by Zhuang Jianyi. Later, Osram purchased a 39.86% stake in Osram Prosperity Holdings held by Prosperity of Hong Kong and finally completed its holding wish.

After Osram entered the company, the differences and contradictions between the management of the company and the major shareholder Osram in the management philosophy gradually became prominent. One party wants to lead Foshan Lighting out of the main business and the dilemma to seek active transformation, while the other party seems to I hope that listed companies will continue to "do nothing".

Analysts believe that Foshan Lighting has long existed a complex pattern of management, Osram and Zhuang Jianyi jointly controlling listed companies. Since Zhuang Jianyi was investigated by the Securities Regulatory Bureau, the internal struggle of Foshan Lighting has been fully publicized. Due to the serious differences between the major shareholders and management of Foshan Lighting, the overall management and governance structure of the company is not in place, which seriously affects the stability and development of the company. Foshan Lighting has been repeatedly recommended by the regulatory authorities to be the best proof.

Risk III: Business risk
In the context of the traditional competition of the main business of the lamps and lanterns from the strong competition and restrictions from the major shareholder Osram, the Foshan lighting management team headed by Zhong Xincai began to seek to break through the LED and new energy fields in 2009. By the end of 2011, Foshan Lighting's accumulated investment in the new energy field has reached 500 million yuan, and all aspects of the industrial chain such as lithium resource development, lithium battery manufacturing, and pure electric vehicle powertrain are laid out.

According to the annual report, in 2011, Foshan Lithium Energy and Fozhao Lithium Battery cathode materials lost 21.03 million yuan and 2.94 million yuan respectively in 2011, and Fozhao Guoxuan Power only slightly earned 87,000 yuan. In addition, there are no investment projects in the development of pure electric vehicle powertrain systems with Dongchang Electric, and the establishment of lithium iron phosphate cathode materials, lithium battery production, and pure electric vehicle production with Taiwan Bixiang Industrial. In 2011, the newly established Fozhao New Light Source Company suffered a loss of 1.16 million yuan. According to the disclosure, the company has recently decided to dissolve and liquidate.

Analysts believe that because the major shareholder Osram did not fulfill the commitment to inject core technology into the company, the company's products gradually lost competitiveness in the market. In the new energy field, due to lack of experience, the investment defeat is also followed. As the country gradually bans the import and sale of ordinary lighting incandescent lamps, the prospect of “large” Foshan lighting with an annual output of more than 500 million incandescent lamps is unknown.

Risk four: stock price risk
It is understood that from the announcement of Foshan Lighting's release of “New Light Source Company Dissolution and Liquidation”, its share price has slipped from 8.51 yuan/share at the opening on June 29 to 7.26 yuan/share at the close on July 9, 7 The trading day fell by 17.22%. On July 11, Foshan Lighting's share price continued to fall, closing at 7.24 yuan, setting a new low in the past two years. From the opening price of 9.61 yuan / share on June 19, Foshan Lighting's share price has fallen more than 30%.

Analysts believe that although the current Foshan Lighting announcement does not disclose more details of related party transactions, the securities regulatory department's punishment for the company and Zhong Xincai is only ordered to correct and accept, but the stock price has become a real "victim", small and medium investment The losses were heavy and the buzz was heard. Some investors also launched the "Foshan Lighting Investor Claims Proposal", calling for joint investors to defend their rights. Under the multiple negative factors, Foshan Lighting's share price risk has increased.

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