Before the market on February 2, A-share photovoltaic company Linyang Energy issued A notice saying that it had received A notice from the family of Mr. Lu Yonghua, the actual controller, chairman and general manager. Mr. Lu Yonghua had received A notice of lien and was assisting the supervisory authorities in the relevant investigation.
The 21st Century Business Herald found that this is the second time in six months that an actual controller of an A-share photovoltaic company has been detained after Jin Baofang, the actual controller of JA Technology, was placed on file for investigation and detained in November last year.
Affected by this bad news, Lin Yang energy opened today shortly after the “word” limit. It’s worth noting that, like JA, Linyang Energy’s share price fell by the daily limit the day before the announcement. According to the 21st Century Business Herald reporter’s understanding, as early as the fourth quarter of last year, the industry came the company’s real controllers were taken away from the investigation of the news. According to this, the 21st Century Business Herald contacted the secretariat of Linyang Energy’s board of directors in December last year, but received a response to the unconfirmed rumors.
Share prices flash “early”
Financial data show that Linyang Energy’s performance is not bad.
The company expects to achieve net profit attributable to shareholders of listed companies of 980 million yuan to 1.12 billion yuan in 2020, up 40 to 60 percent year-on-year from 2019, according to its Jan. 27 announcement. According to the 21st Century Business Herald, Linyang Energy’s profits over the past year were among the highest among A-share photovoltaic companies. In 2020, the net profit of 12 A-share photovoltaic companies may exceed 1 billion yuan (based on the upper limit of performance forecast amount), and Linyang Energy is one of them.
According to public information, Linyang Energy, founded in 1995, started as an electricity meter in its early years and developed into a leading enterprise of intelligent electricity meters and terminal products of electricity information management system and system solutions in China. Subsequently, the company laid out the photovoltaic business, involved in photovoltaic modules, distributed power stations and other fields, to build a “meter + photovoltaic” dual business structure. Among them, the company once had a strong market competitiveness in N-type efficient double-sided single crystal cells and modules, and was selected as a photovoltaic leader program. In December 2020, the subsidiaries of Linyang Energy, Hengdian Dongzi and Sihong Open Source Investment Co., Ltd., a state-owned company subordinate to the Management Committee of Sihong Economic Development Zone of Jiangsu Province, jointly set up a joint venture company to invest in the annual production of 2GW efficient components project.
According to the release of the 2020 earnings preview, the meter will continue to play the role of cash cow. “The company’s annual revenue from the smart sector is expected to range from 2.3 billion yuan to 2.5 billion yuan, up 70 to 85 percent year on year.” Hua An Securities analysis said that EPC business, Linyang energy annual income will reach 1.3 billion yuan to 1.5 billion yuan, a significant year-on-year growth.
However, since the announcement on January 27, the secondary market has “thrown cold water” on Linyang Energy, and the stock price has dropped nearly 23% in the past four trading days, significantly underperforming the A-share photovoltaic sector. Among them, on February 1, the company’s stock price intraday flash crash, a large number of funds fled. According to data provided by Wind, Linyang Energy’s main capital outflow on that day was about 156 million yuan.
February 1, A – share photovoltaic plate continued to pull back. Shares of four photovoltaic companies, including Linyang Energy, Dongwook Blue Sky, Yijing Photoelectric and Orient Risheng, fell by the daily limit. However, the reasons for the last three listed companies to drop the limit are closely related to the performance and loss news disclosed in the previous trading day, and the reason for the flash crash of stock price of Linyang Energy on that day has not been affected by the impact of obvious bad news is doubtful.
In fact, as early as the fourth quarter of last year, Lin Yang energy real controller Lu Yonghua was detained investigation of the news has come out.
The 21st Century Business Herald reporter inquired the company’s public information and found that Lu Yonghua rarely appeared since last October. His most recent activities are: on October 1, 2020, he signed and issued a “Mid-Autumn Festival, National Day” double festival letter of congratulations; In its third-quarter report, Linyang Energy said that “all directors of the company attended the board meeting to review the quarterly report.” But since then, information about Mr. Lu’s activities has stopped abruptly. The 21st Century Business Herald has learned from people familiar with the matter that Lu Yonghua is being investigated in connection with a corruption case. In December 2020, the 21st Century Business Herald contacted Linyang Energy to verify that its board secretariat denied the news, calling it a “rumor.”
The news that the actual controller is detained for investigation is a great bad news, which will have a serious impact on the company’s stock price. But for many investors holding Linyang energy shares, for such a major negative, but too late to react.
A similar situation has occurred with JA Technology, another $10 billion photovoltaic company.
Last November 8 in the evening, the company released a statement, said its November 7 from crystal dragon industrial group co., LTD., according to its total supervisory commission received a notice, the company actual controllers, chairman and general manager Mr JinBaoFang be pingdu supervisory committee according to the law of the People’s Republic of China and inspect the initiate an investigation, lien. But JA’s shares fell by their daily limit in late trading on Nov. 7, the trading day before the announcement.
After today’s opening, Lin Yang energy shares instantly fell by the limit, more than three hundred thousand selling single backlog selling. As of press time, the company’s share price was 6.55 yuan per share, with a total market capitalization of 11.5 billion yuan.
Watch out for “black swans” of corruption in photovoltaic sector
Although Linyang Energy did not disclose the reason for Lu’s detention, sources with knowledge of the matter confirmed to the 21st Century Business Herald that Lu may be involved in a corruption case.
According to the content of the announcement disclosed by the company, Lu Yonghua can still keep in touch with the management and participate in the decision-making of the board of directors, the general meeting of shareholders and related operation and management in accordance with the procedures. However, there is always great uncertainty when the actual controller is detained and investigated by the supervisory organ.
As the largest electricity meter enterprise in China, Linyang Energy entered the photovoltaic industry as early as 2004. Behind this, Lu Yonghua’s photovoltaic feelings are not unrelated. “I’ve never been away from photovoltaic,” he once said.
According to the 21st Century Business Herald, Lu has been involved in a corruption case since his early years.
On March 29, 2017, Feng Jun, former general manager and deputy party secretary of the Shanghai Electric Power Company, was sentenced to life imprisonment, deprived of political rights for life and confiscated all his personal property by the Shanghai First Intermediate Court for taking bribes and having a huge amount of property from unknown sources.
According to the indictment, the Feng couple allegedly solicited and accepted bribes from almost all private entrepreneurs from Jiangsu province, including Lu Yonghua. According to the indictment, from 2005 to 2014, when Feng served as deputy general manager of Jiangsu Electric Power and general manager of Shanghai Electric Power, he helped Lu Yonghua’s company to provide electricity meters to Jiangsu Electric Power and Shanghai Electric Power and sought profits, and solicited and accepted bribes from Lu Yonghua totaling more than 2.8684 million yuan, 2.1502 million Hong Kong dollars and 200,000 US dollars.
Over the past six months, the two A-share photovoltaic companies of ten billion yuan have exposed the news that the actual controller was investigated by the supervisory organ, “black swan” repeatedly, which is worth warning.
The issue has become a top concern for investors since JA disclosed in November that its actual controller, Jin Baofang, had been placed under investigation and detention by Pingdu Municipal Supervision Commission. On January 26, JA Technology responded on the YiYiYi platform of the Shenzhen Stock Exchange, saying, “The company is closely tracking the matter and will disclose any progress in a timely manner.” This indicates that Jin Baofang is still under investigation under detention.
In recent years, the energy sector has become the focus of the anti-corruption campaign. Liu Baohua, deputy director of the National Energy Administration, is under disciplinary review and investigation by the Central Commission for Discipline Inspection and National Regulatory Commission (CCDI) for suspected serious violations of discipline and law, according to a statement released on the CCDI’s website on October 17, 2020.
An insider once told the 21st Century Business Herald that Jin Baofang may be connected to Liu Baohua, a fellow countryman in the energy system, and the two may be involved in the transfer of interests. But this has not been officially confirmed.
Reprint indicated source：Shine Trader Limited Live information