Wind Power Giant Delisting Warning

How does a listed company die? The best negative sample, the former leader of sinoelectric wind, wrote the answer in nine years.

In 2011, one year after the listing of the first high priced shares, Sinovel's share price fell, and the spring rain continued in April.

9 years ago, after being transferred by the Beijing regulatory authority of the China Securities Regulatory Commission (CSRC) to suspend the voting rights of major shareholders, the "self preservation" road of sinoelectric Technology (Group) Limited by Share Ltd (601558.SH) failed.

In April 14th, the wind power giant, once "the world's second and China's first", closed its stock price for 20 consecutive trading days, which was lower than the face value of the stock. It will touch the conditions for terminating the listing and suspend the business, waiting for the Shanghai Stock Exchange to make the final "judgment".

In the latest reply, Sinovel said it was "operating normally" and said that "it is working hard to stabilize and improve the fundamentals of the company's operations, so as to provide favorable protection for the subsequent operation". Then, from the ups and downs of the fifteen year history of the company, what inspiration should the interbank get from it?

Behind the fundamentals of high pricing

"Sinoelectric wind power is the victim of the industry and the capital." An industry analyst who declined to be named told the twenty-first Century economic news reporter that if we want to sum up the reasons for the failure of the company, we must consider it from the two dimensions of "industry" and "capital".

On the website of Huarui wind power official, in twenty-first Century, the economic report reporter saw that the company introduced its "creating the first and miracle of China's wind power equipment manufacturing industry": "the first to introduce advanced international megawatt level wind turbine technology", "the first one to complete the international mainstream and advanced technology of 3MW series of land, sea and intertidal wind turbines with independent intellectual property rights. The first one completed the R & D and production of China's first 5MW and 6MW wind turbines with independent intellectual property rights, "the first offshore wind farm in Europe and China's first national offshore wind power demonstration project".

These four striking "first" represent the position and contribution of sinoelectric wind power in the history of China's wind power. But once the giants were not the real cruelty, the A shares also predicted that a generation of heroes would come to an end.

Founded in 2006, sinoelectric wind has built itself into the first wind power enterprise in China in five years. Behind this, thanks to Han Junliang, founder of the domestic wind power industry's early development of the "unique eye" and capital blessings of the overweight.

In 2004, Han Junliang, who was deputy general manager of Dalian heavy industry Electromechanical Equipment Co., Ltd., sniffed the "draught".

Almost all of China's wind power industry before 2007 was dominated by foreign-funded enterprises. Gamesa, Vestas, GE and other foreign wind enterprises occupied half of China's wind power market by virtue of their own wind power technology and mature industrial chain. Against this background, Han Junliang tried to introduce the foreign wind turbine technology into the wind power industry by means of the manufacturing advantages of his Dalian heavy industries.

The first international advanced megawatt wind turbine technology introduced by Sinovel is based on the decision of Han Junliang at that time. After buying the production license of German Flanders FL1500 series fan, he completed the 1.5 MW wind turbine set up domestic supporting industry chain in Dalian heavy industry, and at that time the mainstream model of domestic wind power industry was only 750 kilowatts.

The technology of the product is available, and it needs financial support urgently. Subsequently, the two heavyweight figures of the domestic capital sector, Mr. Wei Wenyuan and Han Junliang, came together. The former is the founder of Shenyin Securities, while the latter is the designer and founder of the Shanghai Stock Exchange.

The collision between technology and capital has rapidly created the miracle of sinoelectric wind in the capital market. In 2011, after breaking the highest issue price record of A shares, sinoelectric wind power landed in the capital market. After raising about 9 billion 500 million yuan of funds, its total market value on the first day of listing was as high as about 82 billion yuan, and hundreds of billions of wind power enterprises seemed to be around the corner.

Overcapacity caused by overheating in the industry quickly overwhelmed the wind power giant.

In 2011, the domestic wind power industry ushered in the turning point. China's wind power industry has been in the doldrums due to problems such as grid constraints, overcapacity, low price competition and foreign "double reverse" problems. Among them, Hua Ruifeng electric power is the first to bear the brunt of the radical expansion mode. A person close to ST sharp told the twenty-first Century economic news reporter that when the domestic wind power industry encountered inflection point, the company's management still chose the extreme development mode and brought the risk of Gao Cunhuo and high accounts payable.

"Unlike the PV industry, the market of China's wind power industry is relatively limited. It is almost impossible for domestic wind turbine manufacturers to sell their products overseas, which makes the competition in the domestic market extremely fierce." Liu Shuai, a new energy and environmental protection industry analyst at UBS Securities, told an economic news reporter in twenty-first Century that the limited market "cake" prompted fierce competition in the industry. Meanwhile, some wind turbine manufacturers entered the operation field of downstream wind power projects, and the delayed subsidies also affected the return of project funds.

It is worth mentioning that in addition to the overcapacity caused by expansion, Sinovel is also plunged into a quality scandal. In 2011, a number of fans collapsed and fire accidents, the company's fan quality problems once pushed to the cusp.

Since 2012, Sinovel wind has suffered losses. The following year, the company lost 3 billion 400 million, two years of performance on the market "big change".

Capital and capital?

Although Sinovel said in its latest announcement that its operation is normal, the economic news reporter in twenty-first Century contacted China Sinovel for many times to try to understand its current business situation, but the phone was never answered.

"The expansion of production capacity should have its rhythm. In the past, the wind power industry caused the periodic emergence of the industry due to subsidies, and tested the wind power enterprises' step to expand the production rhythm." Liu Shuai pointed out that with the arrival of the era of parity in the wind power industry, demand will be guided by the market, and the cyclical characteristics of the industry will be weakened, and the development of the industry will become more rational.

In fact, several key figures before and after Sinovel power concealed some other capital secrets behind the failure of the company. It is undeniable that Sinovel is the beneficiary of capital at first. Therefore, when the company was founded, it established a relatively dispersed ownership structure, which led to the problem of "historical legacy" without the actual controller status.

When the company was founded, its shareholding structure was set up by five legal entities, including Dalian heavy industries, new energy company, Fang Hai Sheng Hui, Dongfang Hyundai and Tibet new alliance. In 2008, the company introduced Taihua FUTURE and registered capital of 150 million yuan. These original shareholders are roughly divided into three categories: first, the "industry camp" composed of Han Junliang (direct control Tianhua Zhongtai) and Dalian heavy industry lifting group; second, the "capital camp" consisting of Oriental modern, Tibet new league (controlled by Wei Wenyuan and Zhi Dong), and third other camps formed by FU TURE.

The proportion of shareholding between the camps is equal, and the right to speak is tied to each other, and the company does not have the actual controller. Therefore, when Huarui wind power impacted on the A share market, all the camps had the same goal and worked together.

But Sinovel is also a victim of capital. The management of the company is based on a decentralized ownership structure. Han Junliang, who is close to ST sharp, told the twenty-first Century economic report reporter that the mistakes in management strategy caused differences within the management. However, due to the decentralization of shareholdings among the major shareholder groups of the company, the company has long been in a state of no real controller and buried a hidden danger.

In August 2012, after Yu Wei Yuan replaced Han Junliang as the "acting president", the contradiction between several founders of Sinovel wind was open and intensified. In the following months, Wei Wen Yuan Lu sequel set up the position of "President" and "chairman" of the Chinese wind power company, and started the reform of corporate governance, slowed down the pace in a comprehensive way, turned to conservative management, and Han Junliang was out.

However, Wei Wen Yuan did not bring Sinovel wind out of the mire, but caused a number of old staff to leave.

It is worth noting that in the process of "shell keeping" of Huarui wind power, the subsequent management of the company can only increase non recurring gains and losses with the help of equity transfer and other matters to adjust net profit. Even when its market value has fallen below 5 billion yuan, its "shell" value has not attracted the attention of the capital market. The main reason behind this is that the company has too large capital stock.

It is the main means to raise the share price in the A share market by means of high dividend. But Hua Feng electric power has staged a drama of "losing women and folding soldiers".

As of April 14th, the total market capitalization of Sinovel wind was 3 billion 920 million yuan, but its total capital stock was as high as 6 billion 31 million shares. Compared with its initial 1 billion 5 million share, it increased by 5 times.

In June 2011, June 2012 and January 2015, the three dividend payments made by Sinovel wind were the cause of the increase in the share capital of the company. Although Hua Feng later tried to concentrate on chips through repurchase, it had no choice but to own capital to "pry".

After the suspension, Sinovel's stock price was fixed at 0.65 yuan. Once the "face market delisting", the about 200000 shareholders will also be heartbroken. (Editor: Lin Hong)

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