Dehao Runda ( 002005 ) recently disclosed a private placement plan, and plans to raise funds of no more than 3.5 billion yuan to the Wuhu LED project. It is worth mentioning that the company just completed the issuance of 1.5 billion yuan in November last year to invest in three projects such as "LED chip". For a time, investors questioned the Dehao Runda LED project as a “circling machineâ€, and it has been listed for many years without dividends. Why can it still be refinanced on a large scale?
LED project into a "circle machine"
In an interview with reporters, CSI Investment Zhang Zhimin pointed out that LED is a "burning money" industry. Dehao Runda has invested 5 billion yuan in LED projects for two years. Sanan Optoelectronics ( 600703 ) has also been financing every year for the past three years.
Dehao Runda started from small appliances to LED industry in 2009. In March of that year, Dehao Runda entered the LED industry by introducing strategic investors. In July of the same year, Shenzhen Ruituo Display Technology Co., Ltd. was acquired to further increase the LED industry layout.
In October 2009, Dehao Runda first thrown out a 1.5 billion plan to invest in LED chip, packaging and lighting industry chain projects. In November 2010, Dehao Runda successfully issued an additional 1.5 billion yuan at a price of 9.54 yuan per share.
On May 23 this year, Dehao Runda plans to raise 3.5 billion yuan with a target of 15.61 yuan/share. 80% of the funds raised will be invested in the LED epitaxial wafer production line project, and 20% of the funds will be used to supplement the working capital.
LED profit forecast has moisture?
According to the Dehao Runda additional issuance plan, after the project is completed and put into production, the annual average operating income will be 7.956 billion yuan, the annual after-tax profit will be 1.587 billion yuan, and the post-tax internal rate of return will be 25.86%. Together with the estimated net profit of RMB 500 million from the previous three additional projects, Dehao Runda will add 2.09 billion net profit in the next three to four years, equivalent to 10.7 times its 2010 net profit.
Dehao Runda’s profit forecast for such a project has been dubbed “painting cake†by the industry.
In this regard, the staff of Dehao Runda’s secretarial office told reporters that the products of the two companies are similar but the output is different, the size and size are different, and the project profit forecast data is naturally different. For example, the company will produce 1.8 million 4 inch LED epitaxial wafers per year after production, while Sanan Optoelectronics produces 11.25 million epitaxial wafers. The company's refinancing is still a private placement, and there is no intention to make a high project profit forecast.
An industry insider who did not want to be named said that if the Dehao Runda LED project and the LED project previously disclosed by Sanan Optoelectronics were compared, it is obvious that the Dehao Runda project predicts moisture. Dehao Runda has made the LED project profit forecast higher. It is expected that the regulatory layer will approve the company's additional issuance plan as soon as possible, and it will also help attract institutional investors to participate in private placement.
Why is it still financing without dividends?
Dehao Runda has issued two additional RMB 5 billion since last year, all of which are used in the Wuhu LED project. However, since its listing in 2004, Dehao Runda has only one cash dividend.
Why is there only one cash dividend in 7 years? The explanation of the staff of Dehao Runda’s secretarial office is that the company is in the traditional industry, and the annual profit available for distribution is less. Last year, the distribution profit was negative, and the annual profit was not cash dividend. The company’s annual report explained. The reporter specifically reviewed the company's annual report. In 2005 and 2006, the company made a profit but did not pay dividends. The company explained that the profit was less.
According to the “Decision on Amending Certain Provisions on Cash Dividends of Listed Companies†issued by the CSRC in 2008, the refinanced listed companies’ accumulated profits in cash in the last three years are not less than 30 per annum of the annual average distributable profits realized in the last three years. %.
“Even if the distribution and distribution profit in 2010 was negative, there were 10 million distributable profits in 2009. If the company refinanced last year according to the requirements of the CSRC, the cash dividend should reach at least 5,102,600 yuan. The company does not pay dividends and can refinance. It is estimated that there are other reasons," said an industry analyst.
Financial subsidies into performance support
At the same time that Dehao Runda has a large-scale circle of money, the annual financial subsidies are based on “100 million yuan†and the performance report is pushed up. According to statistics, since 2010, Dehao Runda has received a total of 8 government subsidies, a total of 700 million, of which 395 million government subsidies are included in the current results.
According to the first quarter report of Dehao Runda, the company's net profit for the previous period was 65.41 million yuan, while the current government subsidies reached 133 million yuan. This means that, excluding government subsidies, the company's main business is a loss. Therefore, once the government subsidies are reduced or stopped, the LED project capacity cannot be released at one time. Dehao Runda is profitable and does not talk about it. The capital preservation is facing risks, and the decline in performance seems to be difficult to avoid.
LED project into a "circle machine"
In an interview with reporters, CSI Investment Zhang Zhimin pointed out that LED is a "burning money" industry. Dehao Runda has invested 5 billion yuan in LED projects for two years. Sanan Optoelectronics ( 600703 ) has also been financing every year for the past three years.
Dehao Runda started from small appliances to LED industry in 2009. In March of that year, Dehao Runda entered the LED industry by introducing strategic investors. In July of the same year, Shenzhen Ruituo Display Technology Co., Ltd. was acquired to further increase the LED industry layout.
In October 2009, Dehao Runda first thrown out a 1.5 billion plan to invest in LED chip, packaging and lighting industry chain projects. In November 2010, Dehao Runda successfully issued an additional 1.5 billion yuan at a price of 9.54 yuan per share.
On May 23 this year, Dehao Runda plans to raise 3.5 billion yuan with a target of 15.61 yuan/share. 80% of the funds raised will be invested in the LED epitaxial wafer production line project, and 20% of the funds will be used to supplement the working capital.
LED profit forecast has moisture?
According to the Dehao Runda additional issuance plan, after the project is completed and put into production, the annual average operating income will be 7.956 billion yuan, the annual after-tax profit will be 1.587 billion yuan, and the post-tax internal rate of return will be 25.86%. Together with the estimated net profit of RMB 500 million from the previous three additional projects, Dehao Runda will add 2.09 billion net profit in the next three to four years, equivalent to 10.7 times its 2010 net profit.
Dehao Runda’s profit forecast for such a project has been dubbed “painting cake†by the industry.
In this regard, the staff of Dehao Runda’s secretarial office told reporters that the products of the two companies are similar but the output is different, the size and size are different, and the project profit forecast data is naturally different. For example, the company will produce 1.8 million 4 inch LED epitaxial wafers per year after production, while Sanan Optoelectronics produces 11.25 million epitaxial wafers. The company's refinancing is still a private placement, and there is no intention to make a high project profit forecast.
An industry insider who did not want to be named said that if the Dehao Runda LED project and the LED project previously disclosed by Sanan Optoelectronics were compared, it is obvious that the Dehao Runda project predicts moisture. Dehao Runda has made the LED project profit forecast higher. It is expected that the regulatory layer will approve the company's additional issuance plan as soon as possible, and it will also help attract institutional investors to participate in private placement.
Why is it still financing without dividends?
Dehao Runda has issued two additional RMB 5 billion since last year, all of which are used in the Wuhu LED project. However, since its listing in 2004, Dehao Runda has only one cash dividend.
Why is there only one cash dividend in 7 years? The explanation of the staff of Dehao Runda’s secretarial office is that the company is in the traditional industry, and the annual profit available for distribution is less. Last year, the distribution profit was negative, and the annual profit was not cash dividend. The company’s annual report explained. The reporter specifically reviewed the company's annual report. In 2005 and 2006, the company made a profit but did not pay dividends. The company explained that the profit was less.
According to the “Decision on Amending Certain Provisions on Cash Dividends of Listed Companies†issued by the CSRC in 2008, the refinanced listed companies’ accumulated profits in cash in the last three years are not less than 30 per annum of the annual average distributable profits realized in the last three years. %.
“Even if the distribution and distribution profit in 2010 was negative, there were 10 million distributable profits in 2009. If the company refinanced last year according to the requirements of the CSRC, the cash dividend should reach at least 5,102,600 yuan. The company does not pay dividends and can refinance. It is estimated that there are other reasons," said an industry analyst.
Financial subsidies into performance support
At the same time that Dehao Runda has a large-scale circle of money, the annual financial subsidies are based on “100 million yuan†and the performance report is pushed up. According to statistics, since 2010, Dehao Runda has received a total of 8 government subsidies, a total of 700 million, of which 395 million government subsidies are included in the current results.
According to the first quarter report of Dehao Runda, the company's net profit for the previous period was 65.41 million yuan, while the current government subsidies reached 133 million yuan. This means that, excluding government subsidies, the company's main business is a loss. Therefore, once the government subsidies are reduced or stopped, the LED project capacity cannot be released at one time. Dehao Runda is profitable and does not talk about it. The capital preservation is facing risks, and the decline in performance seems to be difficult to avoid.
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