Listed Companies Spin Money Is Read "Magic Spell"

Two months after the original reorganization plan was rejected by the SFC, Tianshan textile was restarted on Saturday.

"The diminished financing of listed companies is related to the current weak market background. For the capital market which is already a bit stretched, it is unbearable to start the refinancing scheme, which will cause the market to vote with feet".

Textile and garment industry

Cold market in the two quarter

Financing of textile enterprises goes from bad to worse.

Since April 19th, the A share market has suffered a "cold spell".

As of June 7th, the Shanghai composite index had fallen by 10.24%, while only 215 of the more than 2180 stocks rose against the market, accounting for less than 10%.

The weakness of the two tier market has brought the first tier market to the market, so the financing and refinancing of listed companies are hard to be active.

According to the latest statistics of WIND information, the total amount of financing in the A share market in 2010 was as high as 10183 billion yuan, and at the same time, it also succeeded in breaking through the trillion dollar integer mark at the same time. The first quarter of 2011, the total amount of A shares accumulated was 245 billion 647 million yuan, which was lower than the average level of financing in the last quarter. Compared with the 390 billion 541 million yuan financing level last year, the total amount of financing decreased by 37.1%. After entering the two quarter, with the weakness of the A share market, the amount of financing in April and May was 78 billion 303 million yuan and 51 billion 829 million yuan, respectively.

Similarly, the financing of textile and garment industry has also read the "magic spell".

In the first quarter of 2011, the total amount of financing in the industry was 23 billion 854 million yuan, of which IPO raised 9 billion 198 million yuan, the issuance fund was raised by 4 billion 650 million yuan, the rights issue was 607 million yuan, and the issue of bonds was 9 billion 400 million yuan.

In the two quarter, the financing of textile and garment industry was significantly tighter. In April, the total amount of financing was 4 billion 296 million yuan, creating a new low in the single month this year, including 2 billion 596 million yuan in initial financing and 1 billion 700 million yuan in bond issuance. In May, financing remained sluggish and total financing amounted to 5 billion 770 million yuan, including 3 billion 170 million yuan in the first issue and 2 billion 600 million yuan in bond issuance.

Specifically, in May 9th, China Textile Group issued 500 million yuan bonds. In May 12th, Anhui Huamao textile Limited by Share Ltd issued 300 million yuan bonds. In May 13th, YOUNGOR group Limited by Share Ltd issued bonds 1 billion 800 million yuan, May 18th Lukang technology first fund-raising 530 million yuan, May 19th nine Mu Wang Limited by Share Ltd initial fund-raising 2 billion 640 million yuan.

It is worth noting that in May 30th, the first day of the listing of the nine herd kings suffered a "break". The issue price of the company's issue price was 22 yuan, which opened 21.3 yuan on the day and closed at 19.13 yuan in the afternoon, down 13.05%. Since then, the stock has been in a "break" state until June 7th, and the stock price is only 21.11 yuan.

Fund-raising is not focused on investment.

Tight financing is the source.

It should not be overlooked that the deep investment dilemma has become a key factor for the financing difficulties of the listed companies in the textile and garment industry.

An industry analyst said that many companies were "not doing their jobs", and that the spread of financing and investment was worrying for investors.

Tianshan Textile:

The company announced a non public issuance plan. It plans to sell 111 million shares to Katie mining and Qinghai Xue Chi separately at a price of 5.66 yuan per share, and purchase 50% and 25% stake of the two companies by 629 million yuan.

According to public information, the west mining industry in 2011 is still in the construction period, until 2012 to produce benefits, facing the lack of funds for project construction, mine construction can not be completed on schedule and other risks.

After the completion of the issuance, Katie mining and Qinghai Xue Chi respectively hold 15.6% and 7.8% stake in Tianshan textile.

Katie, a controlling shareholder of Tianshan textile, said that under the premise of retaining the textile assets of Tianshan textile, Tianshan textile was positioned as its only mineral investment platform.

The annual report of 2010 revealed the production and sale of the main cashmere yarn, cashmere sweater, sweater and blouse in Tianshan textile. In 2011, the focus of the operation was on the expansion of the domestic market and the expansion of the brand. We should increase the sales terminal construction and brand promotion investment and integrate the company's production chain.

However, the purpose of this private placement is to buy shares in the west mining industry, which is suspected to be "out of business". According to the adjusted profit compensation agreement, Tianshan textile intends to hold the 75% stake in Xi Tuo mining.

YOUNGOR:

In May, YOUNGOR issued 1 billion 800 million yuan bonds to become a large monthly financing.

However, YOUNGOR's energy is focused on investment management, which has been recognized as a "subscribed" subscription by the industry.

5 million 343 thousand and 100 shares, a total investment of 91 million 100 thousand yuan, in March 4th, invested 225 million yuan, at the price of 15 yuan / share, it was allowed to hold 15 million shares of UnionPay business; in mid March, the company invested 98 million yuan to subscribe for 4 million shares of the shares of non-public offering of shares at 24.50 yuan / share price; in May 17th, the results of non-public offering of shares issued by Sheng technology announced that in May 17th, YOUNGOR spent $194 million, 9.24 yuan / share, subscribed to shares of shares; in May 24th, YOUNGOR announced that the company participated in Jinggong Technology (private) private placement and successfully subscribed to the shares of shares; the same day, the results of the non-public offering of "Yun Tian" issued by YOUNGOR showed that YOUNGOR was successfully matched with more than 10000 shares and became the largest shareholder in the sky. In January 11th, YOUNGOR announced that the company subscribed the stock of Guizhou Yuan electric power at a price of 17.05 yuan per share in cash.

In June 2nd, YOUNGOR said that it would continue to choose high-quality projects for investment in a certain period of time, and the cumulative amount of foreign investment in 12 consecutive months would exceed 50% of the latest audited net assets of the company.

King of nine:

First raise funds are mostly used for main business development.

According to the prospectus of 9 Mu Wang's prospectus, the company's initial fund-raising fund is intended to be used in marketing network construction projects (1 billion 320 million yuan of investment raised); supply chain system optimization and upgrading project (130 million yuan); information system upgrading project (146 million yuan); design research and development center construction project (51 million yuan); other working capital related to main business.

The company intends to use the proceeds to build 338 new stores, including 162 Direct stores and 176 strategic franchises.

Lukang science and technology first fundraising will be used for multi fiber blended spinning project (mainly semi worsted process technology). After the project is implemented, it can produce 3000 tons of knitting wool yarn.

In view of this situation, a securities analyst said that listed companies should try to avoid using refinancing to raise funds to supplement liquidity or repay bank loans.

In addition, when the listed companies of textile enterprises are refinancing, they should choose projects with advanced technology, and fully demonstrate the advanced nature of the project.