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Yangtze Business Daily News●Huang Cong, reporter of Yangtze Business Daily

Half a year ago, Hasen Co., Ltd. announced the acquisition of an "Apple supply chain" company, and now it is seeing changes.

On the evening of July 16, Hasen Co., Ltd. (603958.SH) announced that it had previously planned to purchase 90% of the equity of Jiangsu Langxun, 45% of the equity of Suzhou Langxue, and 23.0769% of Suzhou Yeyu through the issuance of shares and payment of cash. At the same time, the company plans to issue shares to raise matching funds.

At present, after communication between the company and the counterparty, Hasen Co., Ltd. plans to adjust the transaction plan. It is expected that the adjusted relevant indicators will account for more than 20% of the total corresponding indicators. According to relevant regulations, it is expected that this adjustment will constitute a major adjustment to the reorganization plan.

It should be noted that Jiangsu Langxun and Suzhou Langxun, the acquisition targets of Hasen Co., Ltd., are companies in the Apple industry chain. The company stated that if the demand of the Apple industry chain changes in the future, it may have a significant adverse impact.

Hasen shares currently mainly sell women's shoes domestically, and the company's performance is not ideal. The accumulated losses in the past four and a half years have exceeded 230 million yuan.

It is worth noting that on July 15 and July 16, the share price of Hasen shares "preempted" in advance, and the share price rose by the daily limit for two consecutive trading days, reaching 9.35 yuan per share. However, overall, the company's share price fell by 47% in half a year.

Acquisition assets heavily dependent on Apple

On the evening of July 16, Hasen Co., Ltd. issued an announcement showing that the company reviewed and approved the "Proposal on the <Hasen Trading (China) Co., Ltd.'s Plan to Issue Shares and Pay Cash to Purchase Assets and Raise Matching Funds and Related Transactions> and its Summary" and other proposals related to this transaction in January.

Specifically, Hasen shares intends to purchase 90% of the equity of Jiangsu Langxun Industrial Intelligent Equipment Co., Ltd. (referred to as "Jiangsu Langxun"), 45% of the equity of Suzhou Langxun Precision Hardware Co., Ltd. (referred to as "Suzhou Langxun"), and 23.0769% of the shares of Suzhou Yeyu Enterprise Management Partnership (Limited Partnership) (referred to as "Suzhou Yeyu") through the issuance of shares and payment of cash. At the same time, the company plans to issue shares to raise matching funds.

After the completion of this transaction, Hasen shares will directly hold 100% of the shares of Jiangsu Langxun, directly and indirectly hold 100% of the shares of Suzhou Yeyu, and directly and indirectly hold 58% of the shares of Suzhou Langxun.

At that time, Hasen Co., Ltd. stated in its acquisition plan that through the merger and acquisition of high-quality assets, the listed company would be able to enter the consumer electronics market and automation equipment market with broad market space, achieve a diversified business layout, further expand emerging businesses, diversify operating risks, enhance sustainable development capabilities and risk resistance, and enhance the core competitiveness of listed companies.

Data shows that in 2022 and 2023, Suzhou Langx achieved revenue of 234 million yuan and 235 million yuan respectively, of which Apple's industry chain revenue accounted for 96% and 89% of its total revenue respectively.

Jiangsu Lucent mainly sells assembly equipment for iPads and laptop computers to Apple's industrial chain manufacturers. In 2022 and 2023, the company's revenue was RMB 49.5775 million and RMB 98.3775 million, respectively, of which the proportion of Apple's industrial chain revenue in the total revenue was approximately 90% and 40%.

Subsequently, the Shanghai Stock Exchange sent an inquiry letter to Hasen Co., Ltd., requiring the company to explain the core resources that Suzhou Langx relies on to maintain its supplier qualification in combination with the inspection and certification conditions of Apple's industrial chain manufacturers, and analyze the sustainability of related resources. At the same time, combined with Jiangsu Langxun's business model, orders on hand, customer composition, industry status, etc., explain the main reasons for its substantial increase in operating income in 2023; at the same time, explain the main reasons for the decline in its share of Apple's industrial chain revenue.

In addition, the Shanghai Stock Exchange also requires Hasen Co., Ltd. to explain the specific measures and plan arrangements for the subsequent integration of the target company in terms of business, assets, finance, personnel, organizational structure, etc.

In the latest announcement, Hasen Co., Ltd. stated that after communication between the company and the counterparty, it plans to adjust the transaction plan. The expected adjusted relevant indicators will account for more than 20% of the total corresponding indicators. According to relevant regulations, it is expected that this adjustment will constitute a major adjustment to the reorganization plan.

At the same time, in order to ensure fair information disclosure, safeguard the interests of investors, and avoid abnormal fluctuations in the company's stock price, according to the relevant regulations of the Shanghai Stock Exchange, upon application, Hasen shares will be suspended from trading from the opening of the market on July 17, and the suspension is expected to last no more than 5 trading days.

The stock price fell by 47% in half a year

Hasen Co., Ltd. is mainly engaged in the brand operation and product design of mid-to-high-end leather shoes, and sells leather shoes through offline department store counters and online channels, mainly focusing on domestic sales of women's shoes. It is known as the "King of Real Leather Shoes" in the industry.

From this point of view, this acquisition by Hasen Co., Ltd. is actually a cross-border acquisition, and the company's performance in recent years has not been ideal.

Hasen shares went public in June 2016. In 2013, the company achieved operating income of 2.169 billion yuan and net profit of 142 million yuan, both of which were historical bests.

Since 2014, Hasen's operating income has declined for seven consecutive years, reaching only 892 million yuan in 2020. Moreover, the company has suffered net losses for four consecutive years from 2020 to 2023, with losses of 43.5329 million yuan, 20.0954 million yuan, 156 million yuan and 5.3308 million yuan respectively, with a total loss of 225 million yuan.

On July 11, Hasen Co., Ltd. issued an announcement on expected loss for the semi-annual performance in 2024, showing that the company expects to achieve a net profit attributable to the parent company's owners (hereinafter referred to as "net profit") of -7.5 million yuan to -15 million yuan in the first half of the year; it is expected to achieve a net profit attributable to the parent company's owners after deducting non-recurring gains and losses of -8.5 million yuan to -16 million yuan.

Hasen shares stated that in the first half of 2024, the company increased its product sales and its operating income increased. However, due to the intensified market competition, the average sales price of goods decreased, resulting in a decline in the company's gross profit margin; at the same time, due to the decrease in non-recurring income compared with the same period last year, it resulted in a performance loss during the reporting period.

Overall, Hasen’s net profit loss in the past four and a half years has exceeded 230 million yuan.

It should be noted that in the first quarter of 2024, Hasen’s net profit reached 4.9293 million yuan, a year-on-year increase of 140.49%, which also means that the company’s loss in the second quarter exceeded 12.4 million yuan.

With poor performance, Hasen shares could only take measures such as closing stores and laying off employees to save itself.

By the end of 2023, Hasen Holdings has a total of 1,040 stores, 1,010 fewer than the 2,050 stores at the end of 2015, nearly halving. At the same time, the number of employees in the company has continued to decline. By the end of December 2022, the number of employees in the company had dropped from 8,005 in 2016 to 3,178, a drop of more than 60%.

Regarding the acquisition of Apple supply chain companies, will Hasen shares face the risk of being kicked out of the Apple supply chain like other companies such as OFILM?

Hasen shares also realized this, and the company stated that the target company of this reorganization, Suzhou Langkesi, is heavily dependent on the Apple industry chain. If the demand of the Apple industry chain changes in the future, it may have a significant adverse impact on Suzhou Langkesi.

It should be noted that in the secondary market, from January 16 to January 24, after Hasen Co., Ltd. issued the acquisition announcement, it achieved 7 daily limit increases, rising to 17.69 yuan per share on the 24th. Subsequently, the company's stock price fell amid fluctuations, and as of the close of July 12, it fell to 7.73 yuan per share, a drop of 56%.

Strangely, before the announcement of the proposed adjustment of the major asset restructuring plan, on July 15 and July 16, the share price of Hasen shares "preempted" and rose by the daily limit for two consecutive trading days, reaching 9.35 yuan per share. However, overall, the company's share price fell by 47% in half a year.

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