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Yangtze Business Daily News● Yangtze Business Daily reporter Xu Jia

Houpu Co., Ltd. (300471.SZ) has once again had its actual controller take charge of the private placement after more than three years.

On the evening of July 16, Houpu Co., Ltd. disclosed a plan for a private placement. The company plans to issue shares at a price of 6.39 yuan per share to the actual controller Wang Jiwen and the company controlled by him, Yanxin Holding Group Co., Ltd. (hereinafter referred to as "Yanxin Group"), with a total amount of funds raised not exceeding 427 million yuan. The net amount of funds raised after deducting issuance expenses will be used entirely to supplement working capital.

The Yangtze Business Daily reporter noted that this is the second time that Wang Jiwen has fully subscribed for additional shares issued by a listed company after spending 155 million yuan to purchase Houpu's additional shares in February 2021. In November 2020, Wang Jiwen took control of Houpu through equity transfer. After the completion of this issuance, the proportion of Houpu shares directly or indirectly controlled by Wang Jiwen will increase from 28.29% before the issuance to 38.46%, and his controlling rights will be further strengthened.

However, Houpu shares still face problems with profitability of its main business in the nearly four years since Wang Jiwen took over.

Data shows that Houpu shares have suffered losses in net profit after deducting non-recurring gains and losses (net profit after deducting non-recurring gains and losses, the same below) for six consecutive years since 2018. Among them, from 2020 to 2023 after the change of ownership, Houpu shares' net profit after deducting non-recurring gains and losses accumulated a loss of 415 million yuan, and Houpu shares did not distribute dividends in the past four years.

After raising funds directly from the actual controller and using all of them to replenish cash flow, Houpu's financial pressure will be reduced. Data shows that as of the end of March this year, Houpu's total assets were 2.362 billion yuan and its asset-liability ratio was 46.61%.

The actual controller took over the private placement twice

According to the plan for the private placement, Houpu Co., Ltd. plans to issue no more than 66.791 million shares to specific objects at a price of 6.39 yuan per share, accounting for 16.53% of the company's total share capital before this issuance. The total amount of funds raised will not exceed 427 million yuan. The net amount of funds raised after deducting issuance expenses will be used entirely to supplement working capital.

The target of this private placement has been determined, namely Wang Jiwen and Yanxin Group. Since Wang Jiwen is the controlling shareholder and actual controller of Houpu Shares and serves as the chairman of the company, and Yanxin Group is an enterprise controlled by Wang Jiwen, the issuance of shares to specific targets this time constitutes a related transaction.

A reporter from the Yangtze Business Daily noted that this was the second time in more than three years that Wang Jiwen took charge of Houpu Shares' private placement.

Data shows that Jiang Tao was the controlling shareholder and actual controller of Houpu Shares. In June 2015, Houpu Shares passed the IPO and was listed on the Growth Enterprise Market. In November 2018, Jiang Tao planned to transfer the control of Houpu Shares to Wang Jiwen through equity transfer and voting rights delegation, but the first transaction did not go smoothly. It was not until November 2020 that Jiang Tao and Wang Jiwen signed a share transfer agreement again, and Wang Jiwen became the actual controller of Houpu Shares.

In order to consolidate Wang Jiwen's position as the actual controller of the company and maintain the stability of the listed company's control, Houpu Co., Ltd. launched a private placement plan in February 2021, which is to issue 23.3367 million shares to Wang Jiwen in a private placement, raising no more than 170 million yuan. This private placement was completed in May 2022. The company raised a total of 155 million yuan from Wang Jiwen, and the net amount of funds raised after deducting related expenses was approximately 151 million yuan.

Now that he plans to take over the private placement of listed companies again, Wang Jiwen's control over Houpu Shares will be further strengthened. Houpu Shares also stated that this issuance will help maintain the stability of the company's control and will help send positive signals to the market and small and medium-sized shareholders.

At present, Wang Jiwen directly holds 50,042,100 shares of Houpu Shares, accounting for 12.38% of the company's total share capital, and directly and indirectly controls a total of 114 million shares of Houpu Shares, accounting for 28.29% of the company's total share capital.

Based on the upper limit of the number of shares issued this time, after the completion of this issuance, the total share capital of Houpu will increase from 404 million shares to 471 million shares, and the proportion of shares directly or indirectly controlled by Wang Jiwen will increase to 38.46%. After the completion of the two fixed increases, Wang Jiwen will spend a total of 582 million yuan.

Profitability under pressure, non-GAAP losses for six consecutive years

Behind the actual controller taking on all the "blood transfusions" of the private placement is the pressure on Houpu Co., Ltd.'s profitability.

According to information, Houpu Co., Ltd. has been deeply engaged in the field of clean energy equipment for many years and is a leading domestic provider of overall solutions for clean energy equipment. It has the EPC service capabilities for large-scale energy projects and its products cover the fields of natural gas extraction, natural gas vehicle/marine equipment, hydrogen energy production and storage/refueling equipment, and aviation parts.

In 2015, the first year of Houpu's listing, the company's performance began to decline, and it fell into losses for the first time in 2018. Data shows that from 2015 to 2018, Houpu achieved operating income of 1.113 billion yuan, 1.301 billion yuan, 739 million yuan, and 370 million yuan, and net profits of 177 million yuan, 167 million yuan, 32.4837 million yuan, and -479 million yuan, respectively.

In the following years, Houpu's net profit has been in a state of alternating profits and losses. From 2020 to 2023, Houpu's operating income was 478 million yuan, 875 million yuan, 714 million yuan, and 936 million yuan, with year-on-year growth of -11.87%, 82.87%, -18.47%, and 31.17%; net profit was -168 million yuan, 10.9153 million yuan, -136 million yuan, and -70.1973 million yuan, with year-on-year growth of -905.35%, 106.51%, 1342.19%, and 48.23%.

From the perspective of profitability of its main business, Houpu has suffered losses in net profit after deducting non-operating expenses for six consecutive years from 2018 to 2023, with losses of 484 million yuan, 17.2745 million yuan, 174 million yuan, 8.2866 million yuan, 146 million yuan, and 87.1091 million yuan, respectively. Among them, after the change of ownership, Houpu's net profit after deducting non-operating expenses accumulated a loss of 415 million yuan from 2020 to 2023, and Houpu did not distribute dividends in the past four years.

Regarding the loss in 2023, Houpu Co., Ltd. stated that from the overall business situation, the company's main business was under pressure due to factors such as industry competition, and profitability has not yet been fully restored; and although the company's total expenses decreased slightly year-on-year during the reporting period, the overall period expense expenditure remained at a high level, and the business gross profit could not fully cover the period expense expenditure.

In the first quarter of this year, Houpu Co., Ltd. achieved operating income of 49.6394 million yuan, a year-on-year decrease of 68.24%; net profit and non-net profit were -20.85 million yuan and -24.9726 million yuan respectively, a year-on-year decrease of 91.99% and 121.27%.

After raising funds directly from the actual controller and using all of them to replenish cash flow, Houpu's financial pressure will be alleviated. Data shows that as of the end of March this year, Houpu's total assets were 2.362 billion yuan, its asset-liability ratio was 46.61%, and the company's cash and cash equivalents were 256 million yuan.

Houpu shares said that through this issuance to specific objects, the company's financial strength will be enhanced. Supplementing operating funds can improve the company's financial structure, reduce asset-liability ratio, increase current ratio, and improve operational security and asset liquidity.