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After denying the online rumors of him losing contact, the danger alert for Xu Guangbin, the actual controller of Oriental Materials (603110.SH), has not been lifted.

Red Star Capital noted that as of August 3, Xu Guangbin held approximately 58.71 million shares of Oriental Materials, accounting for approximately 29.17% of the total share capital, and all of these shares were frozen. Moreover, some of the shares were being auctioned off by the court.

Some of Xu Guangbin's stocks are being auctioned

On August 3, 4.96 million shares of Oriental Materials held by Xu Guangbin were being auctioned on the Alibaba Assets Judicial Platform.

As of press time, no one has signed up to participate in the auction. The current price is the starting price, which is about 43.16 million yuan. If no one signs up or bids before 10 a.m. on August 4, the auction will be unsold.

Screenshot from Alibaba Assets Judicial Platform

Public information shows that Xu Guangbin is the actual controller of Oriental Materials. He is 48 years old, a Chinese citizen, and has not obtained residency in other countries or regions. As of August 3, Xu Guangbin held approximately 58.71 million shares of Oriental Materials, accounting for approximately 29.17% of the total share capital.

The Red Star Capital Bureau noticed that all of Xu Guangbin’s Oriental Materials shares were frozen, and this was not the first time that his shares had been subject to judicial auction.

From July to August this year, 29.78 million shares held by Xu Guangbin were auctioned off in six separate judicial auctions, accounting for about 14.8% of the total share capital. However, four of the auctions failed due to no bids, and only 4.96 million shares were sold.

Screenshot from Oriental Materials Announcement

If the shares won in the auction are transferred, Xu Guangbin's holdings will be reduced to 53.74 million shares, accounting for approximately 26.71% of the total share capital. He will still be the controlling shareholder and actual controller of Oriental Materials.

However, the Red Star Capital Bureau was unable to find the judgment on which the auction was based on the China Judgments Online website, or it may have not yet been published.

In fact, Xu Guangbin has been facing constant turmoil recently.

In late July, a letter of complaint circulated online stated that Xu Guangbin, as the actual controller of Huayun Data Holding Group Co., Ltd. (hereinafter referred to as "Hualun Data"), had committed a large number of illegal and irregular acts, and that he had "fled overseas" and was out of contact.

On July 29, Oriental Materials received a regulatory work letter, involving "listed companies, directors, supervisors, senior management, controlling shareholders and actual controllers" and the reason for the handling was "urging the company to verify the situation regarding matters related to market public opinion."

Later, Oriental Materials issued an announcement stating that after verification, its controlling shareholder and actual controller Xu Guangbin was not out of contact and was performing his duties normally. The company's business operations were normal and there were no matters that should be disclosed but were not disclosed.

It is worth mentioning that regarding the claim of "escaping overseas", Oriental Materials did not explain Xu Guangbin's location.

Oriental Materials attempts to transform into the computing power industry

Public information shows that the main business of Oriental Materials is the production and sales of inks for flexible packaging, polyurethane adhesives for lamination, PCB electronic inks and other products. These products are widely used in food packaging, beverage packaging, pharmaceutical packaging and cigarette packaging.

The Red Star Capital Bureau looked through the financial reports and found that from 2021 to 2023, Oriental Materials' revenue was 396 million yuan, 404 million yuan and 394 million yuan respectively, and its net profit was 55.69 million yuan, 19.72 million yuan and 52.02 million yuan respectively.

In the first quarter of this year, Oriental Materials' revenue was about 88.47 million yuan, a year-on-year increase of about 5.84%; its net profit was about 2.6 million yuan, a year-on-year decrease of about 41.79%. Oriental Materials said that the sharp decline in net profit was due to the increase in period expenses.

In fact, Oriental Materials stated in its 2023 financial report that in 2023, the overall demand in the downstream flexible packaging market of the ink industry will remain weak, and the expected significant increase in demand has not occurred.

Oriental Materials is also trying to transform and create new growth points by developing computing power business. In August 2023, Oriental Materials established a wholly-owned subsidiary, Oriental Supercomputing (Shenzhen) Technology Co., Ltd. (hereinafter referred to as "Oriental Supercomputing").

However, the "report card" that Oriental Supercomputing delivered in its first year was not good.

According to Oriental Materials, as of the end of 2023, Oriental Supercomputing's total assets were 9.8779 million yuan and its net assets were 9.0845 million yuan. It achieved operating income of 22,500 yuan and a net loss of approximately 915,500 yuan in 2023.

Red Star Capital noted that Huayun Data, founded by Xu Guangbin in 2010, also has similar business. Huayun Data's official website shows that it focuses on providing cloud computing services with application innovation for enterprise users.

Red Star News reporter Yang Peiwen

Editor: Yang Cheng