The medical beauty business is growing fast, and women’s clothing is still the company’s largest business

Longzi shares three major business segments: fashion women’s clothing, medical beauty and green babies and children. Thanks to the popularity of medical beauty concepts, since 2020, the stock price of Langzi shares has risen by as much as 600% in the last 250 trading days. Langzi shares believes that this is related to the rapid growth of the company’s medical beauty business and the gradual increase in its contribution to the company’s overall profit.

The annual report of Longzi shares shows that in 2020, the company will achieve operating income of 2.876 billion yuan, a decrease of 4.35% from the same period of the previous year; net profit of 142 million yuan, an increase of 141.65% from the same period of the previous year. At a time when the revenue of women’s clothing and other businesses has declined due to the impact of the epidemic, the net profit of the medical beauty business, which is the second largest in revenue, reached 68,867,900 yuan, which contributed nearly half of the net profit of Langzi.

In its reply, Longzi shares stated that as of the end of 2020, the company has 19 medical aesthetics institutions, and the medical aesthetics business sector is also the key development direction in the near future, but it still needs long-term continuous intensive cultivation. The executives of Longzi shares also stated in investor relations activities that medical aesthetics is a long-term, heavy investment industry, and you must be patient with returns. The company will not change its long-term development strategy due to short-term market fluctuations. The development direction and strategic layout of Longzi Medical Beauty is very determined, that is, it adheres to the combination of endogenous growth and extensional expansion to implement the brand expansion plan.

At the same time, Longzi also clearly pointed out that as of the end of the first quarter of 2021, among the company’s three major business segments, women’s clothing is still the company’s largest business segment, and the company’s fundamentals have not undergone major changes.

Purpose of liquidation and reduction of holdings: It is to express the true meaning of supporting the children’s business

The fundamentals of Langzi shares have not undergone major changes. Since June, the stock price has changed its upward trend and has begun to fall, and it has even reached its limit for two consecutive trading days. The fuse that caused the stock price of Langzi to fall into a one-word limit is the company’s controlling shareholder, actual controller Shen Dongri and actual controller Shen Jinhua’s father Shen Bingyun’s clearance plan.

On June 4, Langzi disclosed the “Announcement on the Pre-Disclosure of Shareholding Reduction Plan for Shareholders” (hereinafter referred to as the “Announcement of Shareholding Reduction”), announcing that Shen Bingyun, the third largest shareholder of the company in the past eighty years, was based on his life It is planned to reduce all the shares held for the needs of arrangement and asset planning.

After the two lower limits on June 7 and June 8, the “Announcement on Receipt of Commitment Letters from the Actual Controller and Controlling Shareholders Acting in Concert” (hereinafter referred to as the “Commitment Announcement” According to China, Shen Bingyun promised that after the implementation of its share reduction plan, it will assist the strategic implementation of the medical aesthetics business of Langzi with no less than 500 million yuan through compliance channels and appropriate methods. In the view of the Shenzhen Stock Exchange, Shen Bingyun’s use of funds to reduce holdings is inconsistent.

In its reply, Longzi shares stated that Shen Bingyun confirmed that the real reason for the reduction was due to his advanced age and the needs of his own living arrangements and asset planning. The allocation of no less than 500 million yuan to support the development of the medical beauty business of Langzi shares is based on Shen Bingyun’s careful consideration and confidence in the company’s future development prospects and the development of the company’s medical beauty business, as well as supporting its children’s business. There is no conflict with the reason for the reduction in the real meaning made, and there is no inconsistency.

In the response, Shen Dongri, Shen Jinhua and Shen Bingyun all denied using the “Announcement of Commitment” to maintain the company’s stock price and cooperate with the share reduction.

In addition, in response to some non-compliance statements in the “Commitment Announcement” pointed out by the Shenzhen Stock Exchange, the supplementary announcement issued on June 15 by Longzi shares also clarified the performance method and time. Within 2 years of the expiry of the holding reduction period of this share reduction plan, Shen Bingyun will support the development of the company’s medical beauty business by providing loans and participating in the company’s establishment of a medical beauty industry fund. If after the expiration of the commitment period, Shen Bingyun provides the company with less than 500 million yuan in financial support, Shen Dongri promises to provide the company with the difference in financial support within one month according to the same performance method.

Longzi Medical’s 2020 performance commitment has been changed from “achieved” to “not touched on performance compensation”

In addition to supplementing some of the contents of the “Commitment Announcement”, Longzi shares also issued a correction announcement on the company’s “Expressions on the Performance Commitment of the 2020 Annual Report”.

In August 2019, Longzi shares issued shares to Shen Dongri and 4 other counterparties to purchase the remaining 41.19% of the shares of Longzi Medical and raised funds. Shen Dongri promised that the audited non-net profit of Langzi Medical from 2019 to 2021 shall not be less than 55.7 million yuan, 68.1 million yuan and 70.4 million yuan respectively. If the accumulated net profit achieved by Longzi Medical as of the current year does not reach the cumulative committed net profit as of the current year, the compensation obligation of Shen Dongri will be triggered in the current year.

In the 2020 annual report, the audited non-net profit of Longzi Medical in 2020 is 67,019,300 yuan, and the cumulative net profit from 2019 to 2020 is 133 million yuan, and the cumulative committed net profit is 124 million yuan. Longzi shares call it “Performance commitment has been fulfilled.” In its reply, Longzi changed the above expression to “the cumulative realized net profit is greater than the cumulative committed net profit, and performance compensation has not been touched”.

In addition, in view of the mismatch between the net profit and the net cash flow generated by operating activities in the first to fourth quarters of 2020, the company replied that the main reason was the impact of the epidemic, as well as the company’s women’s clothing business and medical beauty business. It is caused by the time difference between cash flow and operations, which is consistent with the company’s actual operating conditions. In addition, the fourth quarter net profit of Longzi shares was significantly higher than that of the previous three quarters, which was also related to the sales income generated by the sale of 7.14% of L&P’s equity in 2020.

As of the close of June 15th, Langzi shares closed at 45.52 yuan per share, a decrease of 1.11%, and the market value was about 20.1 billion yuan.

Beijing News reporter Wang Zhenzhen

Editor Zheng Yijia proofreads Yang Xuli

Economic Observer reporter Liang Ji The criminal detention did not delay the reduction of holdings. This operation by Pan Xianwen, the actual controller of Sansheng Co., Ltd. (002742.SZ), has aroused widespread suspicion, including the supervisory authorities.

On the evening of June 6, Sansheng shares announced that its controlling shareholder and actual controller Pan Xianwen was taken criminal detention by the public security authorities on June 1 for being suspected of manipulating the securities market. It is worth noting that on June 2, Pan Xianwen reduced his holdings of 150,000 shares of the company; his son Pan Chenggong also reduced his holdings of company shares from May 31 to June 2.

Investors in the secondary market “fried the pot”: Why did they make an announcement only 5 days after being detained? Why can the share reduction operation be completed during the period of criminal detention?

On June 7, Sansheng shares opened the limit lower. The Shenzhen Stock Exchange hurriedly issued a letter of concern on the above-mentioned matters on the same day. Sansheng Co., Ltd. stated in its reply announcement on June 10 that the relevant information disclosure obligors did not violate the relevant regulations on timeliness, and the aforementioned reduction was caused by the forced liquidation of the pledged stocks of the parties.

In fact, since June 2020, Pan Xianwen, the actual controller of Sansheng Co., Ltd., and those acting in concert have entered the fast lane of shareholding reduction. At the same time, Pan Xianwen and those acting in concert also had a high percentage of pledged shares held by them, and they were forced to liquidate their positions by institutions many times.

Since 2019, Sansheng shares have included a total of 16 violations involving short-term transactions by supervisors, criminal detention of the actual controller, and investigations by the Securities Regulatory Commission for violations of the company’s letter disclosure. Sansheng also stated in the announcement that the company does have internal control problems such as the actual controller overriding internal control.

In addition to the criminal detention of the actual controller, Sansheng also disclosed on June 10 that some of the company’s shares held by the actual controllers Pan Xianwen and Zhou Tinge were frozen by the judicial system; in addition, it also announced the chairman and general manager on June 1. Due to Pan Chenggong’s triggering of the default clause agreed in the Zheshang Securities Agreement, the stock may be subject to the risk of forced liquidation again, and Sansheng shares are still facing uncertainty in the future.

The actual accused triggered three consecutive questions after being detained

On June 6, Sansheng announced that the company received a notice from the family of Pan Xianwen, the controlling shareholder and actual controller of the company, that Pan Xianwen was taken criminal detention by the Chongqing Public Security Bureau on June 1 for suspected manipulation of the securities market.

Outsiders questioned the five-day time difference between Pan Xianwen’s Xingwen’s detention and the announcement of Sansheng shares.

Prior to June 3, Sansheng shares announced that Pan Xianwen reduced his holdings of 150,000 shares of the company on June 2, the day after he was detained; Pan Chenggong also added up from May 31 to June 2. Reduced holdings of approximately 2,799,500 shares, including approximately 1,905,500 shares that were liquidated.

According to the 2021 quarterly report of Sansheng Shares, among the top 10 shareholders of the company, the largest shareholder Pan Xianwen and the second largest shareholder Zhou Ting’e are husband and wife and the actual controller of the company. The third largest shareholder Pan Chenggong is the son of the two; the sixth largest shareholder Pan Xiandong He is the younger brother of Pan Xianwen, and Zhou Tingguo, the seventh largest shareholder, is the younger brother of Zhou Ting’e; the above-mentioned five persons constitute connected relationships or persons acting in concert, with a total shareholding ratio of 54.87%. As a listed company with a “family business” color, Sansheng shares are not unexpectedly questioned by investors whether the family intends to delay time in order to “precisely reduce their holdings.”

On June 7, the Shenzhen Stock Exchange issued a letter of concern, throwing out “three consecutive questions”: whether Pan Xianwen’s compulsory criminal detention measures violated the timeliness of information disclosure; Pan Xianwen was detained, and Pan Chenggong’s decision to reduce holdings In the process, whether there is a situation of “precise reduction of holdings” using undisclosed information in relevant sensitive period transactions and constitutes insider trading; whether the actual controller and persons acting in concert, directors, supervisors, and relevant insider information insiders have insider trading.

Attorney Xu Feng from Shanghai Jiucheng Law Firm told reporters that according to Article 85 of the Criminal Procedure Law, the public security organs shall, within 24 hours after detention, except for circumstances that cannot be notified or may hinder investigations. The family members of the detainee shall be notified; and after the situation that hinders the investigation disappears, the family members of the detainee shall be notified immediately.

Sansheng shares stated in a reply letter issued on the 10th that Pan Xianwen’s wife Zhou Ting’e had obtained the detention notice on June 1. However, due to his “lack of understanding of the nature of the matter and legal significance, and unwilling to increase the psychological burden of relatives” Inform others; after consulting with a lawyer, he informed his son Pan Chenggong on the evening of June 3rd. As the chairman of the company, Pan Chenggong held a senior management meeting in the morning of June 4th (Friday) to inform relevant matters. Obtained on June 6th (Sunday) The notification document was submitted to the company’s securities department for information disclosure. The company believes that the relevant letter disclosure obligor does not violate the relevant regulations on timeliness.

The announcement also stated that the aforementioned reduction was caused by the securities companies’ voluntary liquidation of certain company stocks pledged by the parties to AVIC Securities and Zheshang Securities due to the triggering of the default clauses agreed in the agreement in the pledge special transaction unit. The self-dealing behavior of the securities firm that occurred due to the breach of contract is purely passive reduction of holdings for the parties concerned, and the amount involved is relatively small, and there is no “precise reduction of holdings” using undisclosed information and constitutes insider trading.

Sansheng shares also stated that the company’s current operating conditions are normal and the governance structure is stable. The company’s board of directors and management will ensure the normal operation of the company’s business activities and continue to promote the company’s sound development in accordance with the established strategy and business plan.

“The actual controller overrides the internal control”

The reason why Pan Xianwen is suspected of manipulating the securities market is not yet known. What is certain is that over the years, Pan Xianwen and those acting in concert have gradually fallen into a situation of pledged shares, occupied funds, and reduced their holdings.

Public information shows that Pan Xianwen served as the director of Chongqing Jiangbei Gypsum Plant and Jiangbei Special Building Materials Plant from 1995 to 2002. Jiangbei Special Materials (the predecessor of Sansheng Co., Ltd.) founded by him was established in May 2002 and restructured into a joint-stock company in March 2010. It started with the development and manufacturing of gypsum resources, focusing on concrete-based building materials business, and in 2015 Landed on the Shenzhen Stock Exchange in February. However, since 2016, Sansheng has started the cross-border pharmaceutical industry. In 2016, Sansheng Co., Ltd. spent 258 million yuan to acquire 100% of Baikang Pharmaceutical; in 2017, it again spent 538 million yuan to acquire 60% of Chunrui Pharmaceutical.

Sansheng shares were listed on February 17, 2015. Soon after, Pan Xianwen started its pledge. Multiple announcements show that as early as May 2017, the pledge ratio of Pan Xianwen’s shares has reached 94.56%; the quarterly report of 2021 shows that the pledge ratio of Pan Xianwen, Zhou Ting’e and Pan Chenggong reached 97.66%, 83.98% and 100%, respectively.

When the road to pledge financing almost hit the ceiling, Pan Xianwen began to occupy the funds of the listed company.

In March 2019, the Shenzhen Stock Exchange issued a letter of concern to Sansheng shares, requesting the latter to check whether its prepayment balance increased significantly compared with the beginning of 2018 whether it was related to the occupation of funds by related parties. Sansheng shares replied that the company did use its suppliers to pay approximately 449 million yuan in advance to Qingfeng Health, which is controlled by Pan Xianwen, which constituted a capital occupation by related parties. As of April 2019, Qingfeng Health has returned all the principal and interest of the occupied funds.

In September 2019, the Chongqing Securities Regulatory Bureau issued an “Administrative Penalty Decision”, giving Pan Xianwen a warning and fined 900,000 yuan; in addition, Sansheng and its senior executives were fined 30,000 to 900,000 yuan respectively. Sansheng shares once said that the company and related parties will learn lessons and take this as a warning to take concrete measures to prevent this kind of situation from happening again.

However, Sansheng’s funds were occupied by the actual controller twice afterwards. In 2020, Pan Xianwen and his controlling company occupied a total of 188 million yuan of funds of Sansheng Co., Ltd.; in the first quarter of 2021, Pan Xianwen and his controlling company occupied a total of 89.1 million yuan of funds of Sansheng Co., Ltd. For such matters, Sansheng’s 2020 annual report was issued by an accounting firm with an unqualified opinion with an emphasis on the matter.

Sansheng shares stated that the above-mentioned capital occupation is that the actual controller is above the internal control of the company and transfers the funds to the company controlled by the actual controller. The company has not fulfilled the decision-making process of the board of directors and the general meeting of shareholders. The relevant person in charge of the Ministry conducted an internal notification of criticism and fines.

The reporter noticed that in the 2020 internal control self-evaluation report issued by Sansheng on April 28, according to relevant standards, the company has the defect that the actual controller overrides the internal control, which causes the actual controller to pass the supplier And related parties as a capital channel to occupy the company’s non-operating funds.

Senior investment banker Wang Jiyue told the Economic Observer that the actual controllers of listed companies override internal control and illegal occupation of company funds. This is actually a stubborn illness in the securities market, and it is also a problem that the China Securities Regulatory Commission has been focusing on and monitoring. However, at the operational level, the frequent occurrence of such problems is not necessarily caused by the imperfection of the relevant system, but the implementation of the system needs to be carried out by people, but the actual controller often lacks supervision in the company, resulting in the failure of internal control. .

Pledge of equity and illegal appropriation of funds are unsustainable, and Pan Xianwen and those acting in concert have also embarked on the path of reduction.

At the end of June 2020, Sansheng shares announced that Pan Xianwen intends to reduce the company’s shares by no more than 25.92 million shares, and the proposed reduction will not exceed 6% of the company’s total share capital. The reason for the reduction is personal funding needs. At the end of July of the same year, Sansheng shares announced that Pan Xianwen planned to transfer 21.6 million shares of the company at a price of 138 million yuan, accounting for 5% of the company’s total share capital.

In March 2021, Sansheng shares once again disclosed the share reduction plan of Pan Xianwen and his concerted person Zhou Ting’e. The two men calculated that they would reduce their holdings by no more than 25.92 million shares, and the proposed reduction would not exceed 6% of the company’s total share capital.

On June 10, Sansheng shares announced that some of the company’s shares held by the actual controllers Pan Xianwen and Zhou Ting’e were judicially frozen on June 9, 2021. 3,273,800 shares.

Regarding the above matters, the reporter called Sansheng shares, but the other party said that the company is now in a sensitive period and refused to be interviewed by the media.

On June 7th, the share price of Sansheng shares fluctuated and consolidated after closing the limit at 4.62 yuan. It closed at 4.76 yuan on June 11, a 28.7% drop from the April high of 6.68 yuan.

Supervise the rain

In recent days, Pan Xianwen is not alone in the actual controller of a listed company that has been subject to criminal detention measures. On June 7, Hongda shares announced that the company received a letter from the controlling shareholder Hongda Industrial that the actual controller of the company, Liu Canglong, was taken criminal detention by the Chengdu Public Security Bureau on suspicion of breaching trust and using entrusted property. In addition, Fucheng shares, known as the “first funeral and funeral share” of A-shares, in fact, the controller Li Fucheng was investigated by the China Securities Regulatory Commission for suspected short-term trading; Shao Kai, the director and general manager of China Holding Co., Ltd., who had left his post only three days, was suspected Insider trading has also been investigated by the Securities Regulatory Commission.

A senior investment banker of a large Shanghai securities firm told the Economic Observer that if the actual controller of a listed company is subject to criminal detention and compulsory measures, it should be because the circumstances are bad and the amount involved is huge, and the criminal liability stipulated by the criminal law has been violated. At the level of administrative penalties imposed by the China Securities Regulatory Commission.

Wang Jiyue believes that the above phenomenon on the one hand shows that the supervision and law enforcement agencies are increasing their crackdowns on the illegal activities of listed companies. On the other hand, it also shows that the actual controllers of listed companies still have more violations of laws and regulations. Some may be the malicious behavior of deliberately hollowing out listed companies, and some may also be due to the limited channels for major shareholders to reduce their holdings in order to solve the debt crisis or capital chain problems to quench their thirst. In fact, the actual controller’s occupation of listed companies’ funds was once alleviated, but this round of high incidence, he believes that the restrictions on holdings reduction rules and the background of the overall financial system to reduce leverage are also important inducing factors.

Zhou Maohua, a financial analyst at China Everbright Bank, told reporters that, judging from some cases in recent years, it is true that some listed companies have insufficient internal management systems, insufficient internal governance, and internal executive restraint and supervision. Some listed companies have “insiders”. “Illegal behaviors that damage the legitimate rights and interests of shareholders and investors are not conducive to the long-term and healthy development of the company, and are incompatible with domestic high-quality development requirements. However, for listed companies, market financing channels are unobstructed and diversified, and violations of actual controllers are more inclined to lack of corporate internal governance and fundamental issues of company development.

Zhou Maohua said that in recent years, China has deepened financial supply-side reforms, accelerated the completion of legal shortcomings in the regulatory system, promoted the sound management system of listed companies, improved corporate governance, and promoted the high-quality development of listed companies. Strict supervision and tightening of financial institution policies are forcing listed companies to regulate their operations, strengthen their main businesses, improve quality and efficiency, and achieve high-quality development.

During the “two sessions” this year, a member of the Chinese People’s Political Consultative Conference put forward the “Proposal on Further Improving and Clarifying the Scope of Legal Liability of Actual Controllers under Chinese Law to Increase Foreign Investment Confidence.” The China Securities Regulatory Commission stated that the next step will focus on continuing to cooperate with the legislature in making amendments, further improving the criminal liability provisions of the actual controller and cooperating with the revision of the “Company Law”, clarifying the actual controller’s fiduciary duty, and further improving the law on the actual controller. Responsibility regulations and other aspects were improved.

Wang Jiyue believes that the solution to such problems is that the annual audit accountant’s report and disclosure are required; the second is that if there is refinancing, the sponsor will focus on it; and the third is that local securities regulatory bureaus and exchanges will conduct routine inspections and concerns. Problems are found at multiple levels and punished promptly. However, he also said that it is still quite difficult to put an end to this situation.

Text/Editor of Huitong.com: Qin Meng

A corner of the U.S. Treasury bond market is surging, or it may bring new shocks to global risk assets.Goldman Sachs Group expects that the recovery of the U.S. economy will enable the real yield of U.S. long-term Treasury bonds to rise by about 40 basis points, thus reaching the level before the new crown epidemic

Before the bizarre fall in U.S. Treasury yields this month, the sharp decline in U.S. Treasury bonds this year shocked Wall Street.There is a view that if inflation-adjusted yields rebound positively, the market may be caught off guard

Mueller-Glissmann pointed out that the actual rate of return is still 40 to 50 basis points lower than the average level of the five years before the outbreak of the new crown crisis. At that time, investors were generally pessimistic about the long-term growth prospects, and this repricing does not necessarily happen in the short term. , May be carried out within a few quarters; there is still room for the volatility of the interest rate market, which may at least cause temporary indigestion of other assets;

Goldman Sachs strategists recommend that clients use options to bet on higher yields, or go long on the volatility of U.S. Treasury bonds

The US 10-year Treasury bond yield situation is as follows: A change of 2 basis points can show that since mid-March, the range of fluctuations in the Treasury bond market has not been very large.

When considering the conditions required to break through this range, an important lesson from Monday is that it is not enough just for oil prices to fall to negative values. The Fed’s increased participation in the secondary market for US Treasury bonds (effectively monetizing the deficit) has reshaped investors’ expectations of achievable volatility.

The unlimited quantitative easing policy played a role in this transition, and the conversation about the possibility of the upper limit of the yield curve, advocated by Fed officials, also played a role.

Trier Bank analysts believe that, in contrast, it is more realistic for the yield to fall to 0.25% in the short term. This is based on the assumption that although there is a broad consensus that “things will get worse” in terms of the impact of the spread of the epidemic on actual output, the downward pressure on inflation is being guided, but it has not yet been fully integrated into the financial market.

Recently, in the context of abundant market liquidity and steady economic recovery, the global emerging market financial markets have begun to become sensitive, and it seems that both ups and downs are beginning to look at the 10-year U.S. Treasury yield.

As long as U.S. bond yields soar, it is no surprise that stocks, funds, or commodities will be suppressed and prices will fall.

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