YOUNGOR Sells Part Of Assets Of CITIC Shares, 17 Billion Investment Profits Waterloo

Buying and selling is the norm in the stock market.

The "investment bigwigs"

The financial assets previously purchased are being sold in a planned way.

In September 6th,

It was announced that the total amount of pactions handled by the company during the period from April 13th to September 6th this year amounted to 2 billion 657 million yuan, including the sale of financial assets such as CITIC shares and Bank of Ningbo convertible bonds, with a paction volume of 228 million yuan, and the rolling use of idle investment funds to purchase structured deposits. During the period, the accumulated amount of structured deposits due for redemption was 2 billion 429 million yuan.

The financial assets accounted for 10.9% of audited net assets at the end of 2017 in, resulting in an investment income of 31 million 828 thousand and 600 yuan and a net profit of 24 million 434 thousand and 200 yuan (Unaudited), accounting for 8.23% of the audited net profit in 2017.

In the sale list, "CITIC shares" is particularly conspicuous, which is the first time YOUNGOR has sold the company's stock since it spent 17 billion 62 million yuan on CITIC shares in 2015.

According to the times finance and economics understanding, in holding nearly three years time, the CITIC stock has not brought the income to YOUNGOR, but is the big loss.

YOUNGOR relevant responsible person responded that YOUNGOR's CITIC shares have always been financial investments, buying and selling are based on market conditions, there is no special reason.

Whether the future will continue to be sold depends on market conditions.

It is understood that in 2015, YOUNGOR invested a total of 17 billion 62 million yuan to buy 1 billion 455 million shares of CITIC shares, the cost price per share was about 11.72 yuan, and in April 13th of this year -9 6, CITIC stock's stock price was HK $11.9 per share.

CITIC shares net profit fell

The origin of YOUNGOR and CITIC shares can be traced back to 2014. In March of this year, CITIC shares were listed on the HKEx at the time of CITIC shares. At that time, they signed a share subscription agreement with 10 investors. One of them was YOUNGOR, and the rest included pan Hai, Tencent, Zhou Dafu, Guo Henian family and so on.

According to YOUNGOR's disclosure, in 2014, it bought 57 million 556 thousand shares of CITIC stock at 616 million yuan, which was sold in the same year and received a profit of 17 million 711 thousand and 200 yuan.

2015 is the honeymoon period of both.

This year, YOUNGOR signed the strategic cooperation agreement and the subscription agreement with CITIC.

According to the strategic cooperation agreement, YOUNGOR and CITIC will invest in the financial and investment fields, real estate, trade and marketing.

Cooperation in mass consumer goods, agriculture and animal husbandry, medical and health products and other fields.

Under the "subscription agreement", YOUNGOR bought and participated in the new share subscription in the two tier market in 2015, accumulatively held 145451.3 shares of CITIC shares, accounting for 4.99% of the total share capital of CITIC, and the total investment cost was 17 billion 62 million yuan.

The subscription amount of the new shares is 859 million shares (lock up period is 2 years), the price is HK $13.95 / share, the total investment is HK $11 billion 986 million, all are self raised funds.

17 billion of the big investment was questioned by the market at the time. After all, the net cash flow generated by YOUNGOR's business activities at the end of 2014 was only 3 billion 186 million yuan.

However, YOUNGOR believes that CITIC shares have a high quality asset and a comprehensive industrial chain, and the value of the company is undervalued.

It is a pity that CITIC shares, which were highly valued by YOUNGOR, did not win glory for YOUNGOR, but instead nibbled YOUNGOR's profits.

According to the annual report, in 2015, the net profit of YOUNGOR's investment business was 2 billion 727 million yuan, up 12.46% from the year on year.

In 2016, the net profit of investment business was 1 billion 657 million yuan, down 39.24% from the same period, and the overall net profit was 3 billion 685 million yuan, which was down 15.71% from the same period.

By the end of December 31, 2016, YOUNGOR held 145 thousand and 500 shares of CITIC shares, with a fair value of 14 billion 442 million yuan, accounting for -37.75 billion yuan of the fair value of other comprehensive income.

In 2016, YOUNGOR did not specify the impact of CITIC shares' fair value change on profits.

However, in the annual report of 2017, YOUNGOR made a provision of 3 billion 308 million yuan for the impairment of the assets of CITIC shares, which affected the net profit of the company belonging to the parent company for the current period of 3 billion 308 million yuan, and the net profit of YOUNGOR was 297 million yuan during the period, down 91.95% from the same period last year, of which the net profit of investment business was -16.89 billion yuan, down 201.95% from the same period last year.

Faced with such a huge profit gap, YOUNGOR wants to beautify its accounting system.

In April 10th this year, YOUNGOR issued a notice announcing that it would change the accounting method of CITIC shares from the sale of financial assets to long-term equity investments and confirm the gains and losses with the equity method.

After the accounting method is changed, the difference between the net assets and the book value of the corresponding net assets held by YOUNGOR will be 9 billion 302 million yuan, which will be included in the first quarter of 2018. The net assets of the company will be increased by 9 billion 302 million yuan and the company's net profit will be increased by 9 billion 302 million yuan (based on the audit data).

On the same day, YOUNGOR also released a notice of earnings growth. It expects net profit attributable to shareholders of Listed Companies in the first quarter of 2018 will increase by about 8 billion 680 million yuan compared with the same period last year, an increase of about 687.95% over the same period last year.

However, net profit after deducting non recurring gains and losses attributable to shareholders of listed companies decreased by 44.19% compared with the same period last year.

However, the effect of stop loss failed to materialize on schedule. By the first quarter of 2018 announcement, YOUNGOR did not achieve such growth.

According to quarterly reports, on January 1, 2018 -3 31, YOUNGOR's net profit attributable to shareholders of listed companies decreased by 59.64% compared with the same period last year. The main reason is that the net profit of the real estate sector fell by 86.58% compared with the same period last year, and the net profit of investment business decreased by 473 million yuan compared with the same period last year.

During the period, net profit from non recurring gains and losses attributable to shareholders of listed companies decreased by 61.93% compared with the same period last year, which is much lower than expected. The main reason is that the net profit of the real estate sector has been reduced by 13.95% compared with that of the previous year, and the net profit of the non recurring gains and losses has dropped by 13.95% compared with the same period last year. The investment sector has accounted for 213 million yuan in terms of the impairment of the value of the CITIC assets, and it has been included in the regular profits and losses. The net profit from the non recurring gains and losses to the mother is -851.95 million, down 105.64% from the same period last year.

In the first half of 2018, YOUNGOR's net profit attributable to shareholders of listed companies was 1 billion 489 million yuan, down 27.28% compared to the same period last year, mainly affected by the real estate project's delivery in the second half of the year and the provision of 298 million yuan for the impairment of the assets of CITIC's shares.

Over the past 2015-2017 years, YOUNGOR's total interest in holding CITIC shares has not changed, all of which are 1 billion 454 million 513 thousand shares, but the market value of these shares has continued to go down. In 2015, it was 16 billion 719 million yuan, 14 billion 442 million yuan in 2016 and 13 billion 715 million yuan in 2017.

In the half year of 2018, YOUNGOR has reduced YOUNGOR shares to 1 billion 445 million 13 thousand shares, corresponding to a market value of 13 billion 474 million yuan.

In general, even if the accounting method has been greatly buffered, the rate of decline in net profit has slowed down, but as of June 30, 2018, it has been involved in holding.

The performance of YOUNGOR's net profit is still unsatisfactory.

If the YOUNGOR executives "buy and sell are based on market conditions", then YOUNGOR will sell shares of CITIC shares which are heavily encroached on profits.

Investment business is still popular.

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YOUNGOR, which was launched in 1998, divided the business into three parts: clothing, real estate and investment. It is one of the first enterprises to diversify.

Among them, YOUNGOR has made many achievements in the investment field.

According to the finance of the times, in 2007, YOUNGOR gained more than 2 billion 460 million yuan by reducing its stake in CITIC Securities. In 2009, it gained about 1 billion 860 million yuan by reducing CITIC Securities, Haitong Securities and Jinma shares, and gained 536 million yuan from China Ping An, Guang Bo stock and Jin Zhengda in 2015.

YOUNGOR's investment standard of not losing professional investment institutions was once dubbed by investors as "mental arithmetic", "elegant securities" and "elegant investment".

But YOUNGOR has never lost its hand. In the recent 20 years of speculation, YOUNGOR has suffered losses many times.

According to the annual report, YOUNGOR's investment business lost 1 billion 317 million yuan in 2008, lost 230 million yuan in 2012, and lost 489 million yuan in 2013.

The CITIC stock, which was invested in 2015, is a big failure at the moment, which directly led to a decline in overall net profit and a loss of 1 billion 689 million yuan in 2017.

Because of the volatile income of investment business, YOUNGOR has made more than one public announcement to return to the main garment industry. In 2012, the founder Li Ru made a high profile and said "let the clothing industry run."

Then, in 2016, Li Rucheng emphasized once again that if YOUNGOR really wants to be bigger and stronger, clothing is the core.

"The real estate industry is constantly adjusting and controlling. It is not very clear. This road is hard for YOUNGOR to go through, and the opportunity for investment is relatively large. We do not have a very strong and professional team here."

From the recent six years' annual report data, we can see that compared with the ups and downs of the real estate business and investment business, the net profit performance of YOUNGOR's clothing sector is the most stable.

But stability is also a fact of slow growth.

Although the real estate business and investment business are both good and bad, they contribute more to the overall net profit of YOUNGOR, especially the investment business.

It is precisely because of this, even if many times shouted back to the clothing industry, but YOUNGOR's love for investment business is increasing.

According to the times finance and economics understanding, before 2014, YOUNGOR's investment business followed the idea of "adjusting the structure and controlling the scale", but in 2015, when it became a big stake in CITIC shares, YOUNGOR's investment business development thought became "development and stability simultaneously", and has continued to this day.

In the first half of 2018, YOUNGOR invested 1 billion 120 million more in holding 65 million 914 thousand and 100 shares of Ningbo bank, and invested 925 million yuan in 9 new projects, such as Sino integrity credit reporting Co., Ltd. and Beijing Intelligent Information Management Consulting Co., Ltd.

As of the first half of 2018, YOUNGOR has invested 29 billion 26 million yuan, with a final book value of 29 billion 666 million yuan and a market value of 31 billion 613 million yuan.

Overall, despite the drag on CITIC shares, the book value of YOUNGOR's investment business is still higher than the cost of investment, and YOUNGOR does not seem to have influenced investment confidence due to the bad performance of CITIC shares.

After all, it is a veteran of the stock market in the past 20 years. YOUNGOR knows what business is the fastest way to make money.