Changmingshan Is Still Exploring The Development Direction Of Stock Management After 5 Years Of Restructuring

Since the reorganization of Changshan Beiming (000158. SZ) for more than four years, the company's performance has been several times higher than that of a single textile company, and the apparent data is much more beautiful. But in the past four years, the management of Beiming company has frequently reduced its shares and sold more than 8% of its shares.

At the same time, after transforming from a traditional cotton textile enterprise into a listed company with dual main industries of textile and software, Changshan Beiming's profitability did not substantially improve. After deducting non-profit, the net profit continued to lose, and the loss continued to expand in the first half of the year. It can only rely on the land relocation subsidies of the previous company to maintain the book profit. The company told the China times that this is because of the high annual R & D expenses affecting profits. Although the company is in the software industry, but has not developed the core product, is still groping for the development direction.

Beiming executives frequently reduce their holdings

On the evening of July 22, Changshan Beiming issued two announcements, which, in the words of shareholders, were mixed.

Fortunately, the company received 371 million yuan of land compensation from Shijiazhuang land reserve center. The cash flow was further improved, which had a positive impact on the annual profit. The factory land of Changshan beimingyuan No.5 branch will be sold to the public for 2.011 billion yuan on December 24, 2019. According to the local land compensation standard, the company can get 60% compensation from it. As of the announcement date, all compensation for the land has been received.

The worry is that Beiming holdings, the company's second largest shareholder, Li Feng, vice chairman of the board, and Ying Huajiang, the general manager, will reduce their shares by no more than 2% in six months.

According to the 2019 annual report, Li Feng is the chairman of Beiming holding and Ying Huajiang is the director of the company. Therefore, it is the unanimous decision of the northern Ming Dynasty to insist on the reduction this time.

Changshan Beiming is composed of Changshan shares and Beiming holding company. Changshan is a state-owned cotton textile enterprise in Shijiazhuang, Hebei Province, with poor business performance. Beiming software, a subsidiary of Beiming holdings, was a small and well-known software company at that time. Although its total assets were 1.3 billion yuan at that time, its profitability was fair, and its annual net profit was stable at around 100 million yuan.

In 2014, Changshan acquired 100% equity of Beiming software held by 6 institutions such as Beiming holdings and 41 natural persons such as Li Feng by issuing 441 million shares.

After the completion of the transaction, Changshan shares also entered the emerging software industry from the textile industry, and transformed into a listed company supported by both textile and software industries.

With the completion of the acquisition of Beiming system by listed companies, the company's performance has been greatly improved, and software service has become the main source of profit. In October 2017, Changshan shares was officially renamed Changshan Beiming.

The listed companies have completed the merger and acquisition of Beiming group, and the management of Beiming Holdings has also entered the listed companies. Mr. Li Huafeng, vice chairman of the board of directors, should be Mr. Li Huafeng in 2015. But over the years, the northern Ming system has been decreasing.

At the end of 2015, Beiming holdings was the second largest shareholder of Changshan Beiming, holding 15.31% of the shares; as of the date of the above announcement, the shares were reduced to 12.47%. In the past four and a half years, Beiming Holdings has reduced its holdings by 2.84%.

According to the official website of the Shenzhen Stock Exchange, the changes in the shares of Changshan Beiming since 2016 are basically from the management of Beiming, including Li Feng, Ying Huajiang, Xu Weibo, Tong Qingming and he Changqing, who have frequently reduced their holdings, accounting for 8.59% of the total share capital of the company.

The staff of North China times, which has more than 40 shareholders, told the Beijing times that there is a high demand for capital. After the initial reduction of Li Feng's shareholding for many times, she only held about 3.0% of her shares. Although he is a senior manager of the company, his income is limited if he only depends on his salary. It is normal for him to reduce his holdings and gain profits.

Losses of successive years after deduction

Recently, Changshan Beiming released a semi annual performance forecast, with a loss of 70-90 million yuan in the first half of the year, a decrease of 332.71% - 399.20% compared with the same period of last year.

The company said that the year-on-year decline in business performance was mainly due to the impact of the epidemic, customers' delay in returning to work, and short-term impact on business development. The company's net profit loss in the first quarter was 98 million yuan, and the net profit in the second quarter was expected to be between 8 million yuan and 28 million yuan. Among them, the textile business was at a loss in the first half of the year; although the software business was profitable, the R & D expenses increased by more than 50 million yuan compared with last year, resulting in a decline in performance.

Looking at the data after the merger of the two companies, although the revenue scale of Changshan Beiming software business increased from 2.1 billion yuan in 2015 to 4.7 billion yuan in 2019, the gross profit margin decreased from 22.61% to 15.97%. After deducting non-profit, the company only made 40 million yuan in 2015 after the merger and acquisition was completed, and since then, the overall loss has continued to rise. In 2019, the net profit of Changshan Beiming is 273 million yuan, which is the low point in many years.

Fortunately, Changshan shares developed earlier and was a famous local king. According to the data, Changshan Beiming began to move its factory in the main urban area of Shijiazhuang city since 2012. Since then, Changshan Beiming has received "government relocation subsidies" allocated by Shijiazhuang Municipal Finance Bureau almost every year, mostly more than 100 million yuan, including 602 million yuan in 2017. Therefore, Changshan Beiming continuously increased profits and beautified the annual report data.

It is worth noting that Beiming software made performance commitments when it was acquired, and its non net profit deduction from 2015 to 2017 was no less than 170 million yuan, 211 million yuan and 254 million yuan respectively. Beiming software overfulfilled the gambling, but it did not rely on the company itself, but through the acquisition of five target enterprises.

The above-mentioned company personnel told reporters that after the acquisition of Beiming software, the management of the company has been well integrated, and both sides hope that the company will be better. Net profit continued to lose after deducting non-profit, because the company invested a lot of research and development expenses every year. "When the market mentions financial software or internet medical software, it's natural to think of some companies. But Beiming software does everything, and it still hasn't found its own positioning. High R & D is also the company's exploration of the development direction of software business."