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Shen Dongjun, the founder of "Shanghai's No. 1 jewelry stock" Laisen Tongling, recently started a "clearance-style" reduction of holdings. After Shen Dongjun announced on July 8 that Laisen Tongling had reduced all its shares, Shen Dongjun announced last night that he would transfer 5.3% of his shares to Ningbo Ningju, a private equity fund worth 10 billion yuan.

On the evening of July 16, Laisen Tongling issued an announcement stating that the company had received a notice from its former chairman, Shen Dongjun, that Shen Dongjun had transferred his 5.3% stake in the company to Ningbo Ningju Asset Management Center (Limited Partnership) - Ningju Quantitative Multi-Strategy Securities Investment Fund (referred to as "Ningbo Ningju") through an agreement transfer.

After the share transfer, Shen Dongjun's shareholding in Laisen Tongling dropped from 10.61% to 5.31%, and he will no longer be the second largest shareholder of Laisen Tongling. Shen Dongjun and Ningbo Ningju will each hold 5.31% of Laisen Tongling.

It is reported that Ningbo Ningju was established in 2014. It is one of the first 100 private equity fund management companies approved for registration in the country and one of the new generation of 10 billion private equity funds. The actual controllers of the company are Xie Yeqiang and Ge Peng. However, since 2022, the management scale of Ningbo Ningju has declined. It currently manages 151 funds with a management scale of 2 billion to 5 billion yuan.

Shen Dongjun is the original founder and CEO of Laisen Tongling. Due to his divorce from his wife Ma Qiao in 2021, he completely left the management of Laisen Tongling in January 2022, and since then began to reduce his holdings in Laisen Tongling.Recently, Shen Dongjun announced that he would sell all of his shares in Laisen Tongling. This move may mean that Shen Dongjun will completely leave Laisen Tongling.

Shen Dongjun intends to sell off Laisen Tongling recently

Recently, Shen Dongjun announced that he would start a "clearance-style" reduction of holdings in Laisen Tongling.

Laisen Tongling (603900) announced on the evening of July 8 that Shen Dongjun, a shareholder holding more than 5% of the company's shares, plans to reduce all of his shares in the listed company through an agreement transfer starting from July 12, and the transferee will be an independent third party. At that time, Shen Dongjun held 36.4264 million shares, accounting for 10.61% of the total share capital.

Influenced by this news, on July 9, the share price of Laisen Tongling plummeted by 5.30% to close at 4.47 yuan, hitting a new low in four months, and the total market value shrank to 1.534 billion yuan.

After Shen Dongjun announced his plan to sell all of his company's shares, Laisen Tongling Chairman Ma Jun recently responded to the media and said that Shen Dongjun is currently only a shareholder, and after the transfer agreement, there will be no changes in Laisen Tongling's directors, supervisors and senior managers.

Shen Dongjun is the original founder and CEO of Laisen Tongling. In 1999, Shen Dongjun and his brother-in-law Ma Jun jointly invested in the establishment of Jiangsu Tongling Jewelry Co., Ltd., the predecessor of Laisen Tongling. When the company was first established, the two held 50% of the shares each. Ma Jun is the current chairman of Laisen Tongling.

Shen Dongjun once upgraded Leysen Tongling into an international brand through his strategic investment in Leysen, a Belgian royal jewelry brand. In 2016, Leysen Tongling was listed on the Shanghai Stock Exchange and was known as the "No. 1 jewelry stock in the Shanghai Stock Exchange" with an issue price of 14.25 yuan. At that time, the listed company was called Tongling Jewelry, mainly engaged in brand operation, product design and sales of diamond jewelry. After acquiring the Belgian jewelry brand Leysen in 2017, it was renamed Leysen Tongling.

In November 2019, Shen Dongjun's wife Ma Qiao filed for divorce and requested property division, which was called a "sky-high divorce case" by the media at the time. Shen Dongjun's 15.58% stake was divided to Ma Qiao, and Shen Dongjun also lost his controlling position.

In January 2022, Shen Dongjun resigned from the positions of chairman and director of the listed company and completely left the management of Laisen Tongling. Ma Jun replaced Shen Dongjun as the new chairman of Laisen Tongling. At that time, Shen Dongjun directly held 15.58% of Laisen Tongling's shares, making him the second largest single shareholder.

After 2022, Shen Dongjun started a continuous reduction mode. According to the annual reports of Laisen Tongling, in 2022, Shen Dongjun reduced his holdings of Laisen Tongling by 6.7947 million shares, and calculated at an annual average price of 7.55 yuan per share, the cumulative cash out exceeded 51 million yuan; in 2023, he reduced his holdings by 9.8218 million shares again, and calculated at an annual average price of 6.66 yuan per share, the cumulative cash out exceeded 65 million yuan.

Laisen Tongling's performance continues to suffer losses

The main products of Laisen Tongling are diamonds, gold, jade, etc. Its main products are inlaid jewelry. It entered the gold product retail business in August 2023.

According to the semi-annual performance forecast disclosed by Laisen Tongling on July 10, Laisen Tongling expects its net profit attributable to shareholders of the parent company to be a loss of 30 million to 43 million yuan in the first half of 2024, turning from profit to loss year-on-year, with a profit of 6.0322 million yuan in the same period last year; the non-net profit will be a loss of 29 million to 42 million yuan, with a profit of 1.7161 million yuan in the same period last year.

Regarding the reasons for the decline in performance, Laisen Tongling explained that in the first half of 2024, the company continued to increase its efforts to expand its gold business, with operating income increasing by more than 40% year-on-year, and the proportion of gold business revenue increased significantly, but the gross profit margin of the gold business was low, resulting in a significant decline in the company's overall gross profit margin and failure to achieve profitability.

The increase in the proportion of gold product business also dragged down the performance of Laisen Tongling in the first quarter of this year. The company's first quarter report for 2024 showed that its operating income was 242 million yuan, a year-on-year decrease of 3.08%; its net profit attributable to the parent company was a loss of 18.7603 million yuan, a year-on-year change from profit to loss. As for the change from profit to loss, Laisen Tongling said that the main reason was the increase in the proportion of gold product sales and the decline in comprehensive gross profit margin.

Laisen Tongling entered the gold product business with the original intention of coping with the dilemma of declining performance, but gold products have not yet contributed any incremental growth.

Laisen Tongling originally focused on diamond setting business. However, since 2023, the overall demand in the diamond industry has remained relatively weak, and China's diamond jewelry market has recovered slowly. Laisen Tongling has introduced incremental businesses such as gold jewelry, inlaid gold, and pearls on the basis of stable diamond setting, and opened up a new gold jewelry track called "Oujin".

At that time, Laisen Tongling had frankly expressed its high hopes for the gold business, and stated that in the future it would increase the design and research and development of gold products, continuously innovate marketing methods, further build an advantageous positioning in the gold business field, and enhance Laisen Tongling's profitability.

Editor: Peng Bo

Proofreading: Zhu Tianting