The domestic game leading 37 mutual entertainment luxury will be added to the ground, but the voice of suspicion.
On the evening of March 7, Sanqi Interactive Entertainment announced in several announcements that it had successfully raised 2.933 billion yuan after planning to raise capital for nearly a year. Among the objects of the placement, not only Schroders, a veteran public offering bank of communications, participated in the subscription, but also Ruiyuan Fund headed by fund boss Chen Guangming.
With the success of fund-raising accompanied by doubts, Sanqi Entertainment is not short of money. As of the end of the third quarter of 2020, the company’s book broad monetary funds as high as 4.3 billion yuan. In the third quarter of last year, the company made a profit of 2.26 billion yuan.
What makes people confused is that in this fundraising, 37 Interactive Entertainment is expected to invest 1.1 billion yuan in the construction project of the headquarters office building. In 2017, the company spent 819 million yuan to buy office buildings in Guangzhou.
According to the preliminary statistics of the Changjiang Business Daily, the purchase and construction of the above buildings, Sanqi Entertainment will cost up to 3 billion yuan.
Throw 3 billion yuan to buy and build a building, is it really the need for business or investment appreciation?
On the afternoon of March 8, Wang Sijie, the representative of 37 Entertainment Securities, told the reporter of Changjiang Business Daily that the company bought and built office buildings for business needs. In recent years, the company has developed rapidly, with nearly 4000 employees at present.
Not short of money still raise money on a large scale
Do not lack of money of 37 mutual funding on a large scale, there is suspected money circle.
The latest announcement shows that the large-scale private placement of Sanqi Entertainment has been successfully completed, raising 2.933 billion yuan.
The fixed increase market attention, due to two factors. On the one hand, the subscription team line-up is luxurious, on the other hand is the necessity of raising funds and orientation. Subsigners are Zhengxin Gu, Haobai Holdings, Bank of Communications Schroeder Fund, Ceibs Fund, Taikang Life Insurance, Ruiyuan Fund, Chen Gencai, China Asset Fund and Yinhua Fund, with subscription amounts of 500 million, 140 million, 570 million, 166 million, 403 million, 702 million, 80 million, 202 million and 170 million respectively. The lock-up period is 6 months.
Among these subscribers, there are public offering institutions, insurance capital, and industrial capital. Among them, Ruiyuan Fund subscribed the highest quota, up to 702 million yuan. In addition, No. 100 Holdings, a subsidiary of China Telecom Corp., also contributed 140 million yuan. Sanqi Entertainment’s fundraising started on April 2 last year. At that time, the company disclosed the pre-plan for the private placement, the company planned to issue no more than 106 million shares to raise a total of no more than 4.5 billion yuan. There are three projects raised, namely online game development and operation construction, 5G cloud game platform construction, and Guangzhou headquarters building construction, which are planned to raise 1.6 billion yuan, 1.65 billion yuan and 1.250 billion yuan respectively. The total investment of the three projects is expected to be 4.585 billion yuan.
In June last year, SanQi Interactive Entertainment disclosed the revised plan for the fixed increment, and the total amount of capital raised was reduced to no more than 4.463 billion yuan, a decrease of 37 million yuan, mainly for the proposed amount of capital raised for the construction of the headquarters office building. On October 30, the company disclosed the second revision of the fixed increase plan, the total amount of capital raised was reduced again, to no more than 4.296 billion yuan, this time, the three financing projects to use the amount of capital raised only reduced.
Finally, by the completion of the company’s placement of additional capital raising, the actual capital raised was 2.933 billion yuan, a decrease of 1.567 billion yuan compared with the initial proposed capital raised of 4.5 billion yuan.
Why is there such a big gap between the planned amount and the actual amount raised?
On April 1 last year, the stock price of Sanqi Entertainment was 32.01 yuan/share. On March 5 this year, the company closed at 29.83 yuan/share, slightly down. During the period, the share price once reached 51.08 yuan/share. This fixed raise capital, the actual issue price is 27.77 yuan/share.
Analysts said the company’s share price broke through the 50 yuan mark in July last year and began to decline, reaching 24.60 yuan on Nov. 26 last year. Since then, there has been some recovery, but not much, far from the high. This is the main reason for the company’s capital shrinkage.
In addition, there has been doubts about the circle of money in this fixed increase of Sanqi Interactive Entertainment. After all, the company’s business performance is good and there is no lack of money.
By the end of September last year, the monetary capital of Sanqi Interactive Entertainment reached 2.465 billion yuan, the financial products reached 1.865 billion yuan, and the broad monetary capital reached 4.330 billion yuan (excluding other investments such as stocks held by Sanqi Interactive Entertainment). The total long-term and short-term debt of Sanqi Interactive Entertainment in the same period was 889 million yuan. In addition, the company’s advance payment amounted to 1.175 billion yuan.
In the first three quarters of last year, the company realized the net profit belonging to the shareholders of the listed company (for short, net profit) of 2.26 billion yuan, and the net profit (for short, deduction of non-regular line profit and loss) of 1.951 billion yuan. The company realized a net inflow of 2.444 billion yuan in operating cash flow.
These data show that the capital of Sanqi Interactive Entertainment is indeed sufficient, and this fundraising seems unnecessary.
It is worth mentioning that in the doubt, 37 interactive entertainment planning a large – scale investment. On the evening of December 7 last year, the company announced that it would pay 2.88 billion yuan in cash to acquire 20% of its holding subsidiary, Guangzhou Sanqi, in order to achieve full control.
With this investment, 37 mutual entertainment this fundraising is necessary. This investment is not much different from the actual amount raised this time.