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Trainee reporter heard

On the evening of July 16, Guanghui Automobile announced that the company's closing price on that day was 0.87 yuan/share, and the closing price has been below 1 yuan/share for 19 consecutive trading days. Even if the stock price hits the daily limit in the next trading day, it will trigger the trading delisting indicator because the stock price has been below 1 yuan/share for 20 consecutive trading days.

Affected by the above matters, Guanghui Auto’s convertible corporate bonds “Guanghui Convertible Bonds” will also be delisted.

Guanghui Auto is a well-known domestic auto dealer. Its market value once exceeded 100 billion yuan, but as of the close of July 16, its market value was 7.212 billion yuan. As of the end of the first quarter of this year, Guanghui Auto had 106,500 shareholders, and on July 16, 920 million yuan of funds entered the market to buy the stock at a low price.

Both stocks and bonds will be delisted

Looking back at Guanghui Auto’s stock price trend on July 16, the stock price trend was relatively stable from the opening to 14:00 in the morning, but the stock price began to fall from 14:00 and closed down 10.31% to 0.87 yuan per share.

Looking back, from June 20 to July 16, the daily closing price of Guanghui Auto was below 1 yuan per share for 19 consecutive trading days.

At the same time, based on the closing price of 0.87 yuan per share on July 16, even if Guanghui Auto hit the daily limit on July 17, its share price would still be below 1 yuan per share, which means it would be delisted at par value.

According to the first paragraph of Article 9.2.1 of the "Shanghai Stock Exchange Stock Listing Rules" (hereinafter referred to as the "Stock Listing Rules"), if the daily closing price of a listed company that only issues A-shares on the Shanghai Stock Exchange (hereinafter referred to as the SSE) is lower than RMB 1 per share for 20 consecutive trading days, the company's shares may be delisted by the SSE.

Guanghui convertible bonds were also affected by the above-mentioned events and triggered delisting. On July 16, Guanghui convertible bonds were sold off in large quantities at the end of trading and hit the 20% limit down.

According to Article 9.1.17 of the Stock Listing Rules, if the shares of a listed company are delisted, the convertible bonds and other derivatives issued by it shall also be delisted. The delisting of convertible bonds and other derivatives shall be handled in accordance with the relevant provisions on the delisting of shares.

Public information shows that the Guanghui convertible bonds issued by Guanghui Auto are rated AA+ and are investment grade bonds.

Many times before, I saved myself

The reporter noticed that Guanghui Auto took many self-rescue measures before and after facing the pressure of delisting.

On June 4, Guanghui Auto announced that the company's controlling shareholder, Xinjiang Guanghui Industrial Investment (Group) Co., Ltd. (hereinafter referred to as Guanghui Group), plans to invest 50 million to 100 million yuan to increase its holdings in the company's shares within the next six months.

At the same time, some directors, supervisors and senior management of Guanghui Auto plan to invest a total of 1.3 million to 2.3 million yuan to increase their shares.

Some directors, supervisors and senior managers of Guanghui Group and Guanghui Auto plan to increase their holdings based on their recognition of Guanghui Auto's long-term investment value and confidence in its future sustainable development, in order to maintain the stability of Guanghui Auto's share price and the interests of the majority of investors.

However, Guanghui Auto's share price fell below 1 yuan per share for the first time on June 20. Under the risk of delisting at par value, Guanghui convertible bonds fell 50% in the four trading days from June 20 to 25.

In order to cope with the pressure of delisting, Guanghui Group did not hesitate to give up the controlling stake of Guanghui Auto.

On July 10, Guanghui Auto received a notice from Guanghui Group that Guanghui Group is planning the equity transfer of Guanghui Auto with Xinjiang Jinzheng New Materials Technology Co., Ltd. (hereinafter referred to as Jinzheng Technology).

According to the agreement signed by all parties, Guanghui Group will transfer its 24.5% stake in Guanghui Auto to Jinzheng Technology after December 19, 2024. If a formal agreement is finally signed and the transaction is completed in accordance with the framework agreement, the control of Guanghui Auto will change.

Jinzheng Technology was established in April 2008. It is a company under Xinjiang Jinzheng Industrial Group Co., Ltd. (hereinafter referred to as Jinzheng Group) that specializes in serving enterprises in digital transformation. Together with its affiliated company Zhongjun Technology Co., Ltd. (hereinafter referred to as Zhongjun Technology), it has developed and operated the comprehensive business platform "Business Helper", the enterprise management digital transformation platform "Enterprise Management Helper", and the platform construction service "Enterprise Link Duo".

Guanghui Auto announced that Jinzheng Technology is in good operating condition and it is reasonably judged that there are no obstacles to its ability to pay Guanghui Group. Jinzheng Group promised that Jinzheng Technology will pay 100 million yuan of intention money to Guanghui Group's designated account before July 20, 2024.

In addition to the change in controlling rights, Guanghui Auto also signed a strategic cooperation agreement with Zhongjun Technology.

On July 13, Guanghui Auto announced that Guanghui Auto and Zhongjun Technology will focus on automotive service business, develop related new productivity businesses such as intelligent software and intelligent devices, comprehensively promote Guanghui Auto's development into high-tech fields, accelerate technological transformation, and reshape Guanghui Auto's value system.

Fierce competition in the industry

China Guanghui Auto is a leading domestic passenger car distribution and service group. By the end of 2023, it has established a national automobile distribution network covering 28 provinces (autonomous regions and municipalities), operating a total of 735 business outlets, including 695 4S stores.

However, Guanghui Auto's current profitability is not ideal. On July 13, Guanghui Auto released its performance forecast, predicting that the company's net profit attributable to shareholders in the first half of 2024 will be a loss of 583 million to 699 million yuan, and its net profit after deducting non-recurring items will be a loss of 750 million to 870 million yuan.

Guanghui Auto analyzed the reasons and said that due to the intensified competition in the industry and the price war among major automakers to grab market share, the company's new car sales volume and gross profit margin have both declined compared with the same period last year.

At the same time, Guanghui Auto adopted the "closure, suspension and transfer" measures for weak brands with poor performance, continuous losses and inefficient stores, resulting in impairment and accelerated amortization of related assets such as accounts receivable and franchise rights during the reporting period, incurring one-time losses and expenses.

In addition, Guanghui Auto's asset impairment increased compared with the same period in 2023, mainly due to inventory impairment provisions and signs of impairment in its long-term equity investment company Shanghai Aika Investment Center (Limited Partnership), resulting in corresponding impairment losses.

Editor: Captain

Review: Chen Mo

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