This real estate company is making "small moves" again, in order to "protect" its shares | Jinke | small actions
As a representative of a real estate company on the brink of delisting, Jinke Group once again took action and successfully suspended trading when the stock price crossed the line above 1 yuan.
On the evening of the 6th, Jinke Group announced that it plans to purchase 20% equity of Chongqing Hengsheng Daye Construction Technology Group Co., Ltd. held by its parent company's controlling subsidiary Chongqing Liangjiang New Area Keyi Small Loan Co., Ltd. through a share issuance. Due to the uncertainty of this matter and to avoid significant impact on the company's stock price, Jinke Shares will be suspended from trading starting from the morning of June 7, 2023. Jinke Co., Ltd. is expected to disclose its trading plan within no more than 10 trading days. If the board of directors fails to review and disclose the trading plan within the aforementioned period, Jinke Co., Ltd.'s stock will resume trading no later than June 21, 2023, when the market opens.
The announcement shows that Hengsheng Daye has four core main businesses, namely green new building materials business, prefabricated EPC general contracting business, BIM and intelligent control service building industrialization consulting services. It currently has two research institutes, one Class A design institute, one assembly and construction enterprise, two BIM companies, and three green new building materials companies.
For the purpose of the targeted issuance and purchase of shares mentioned above, Jinke Shares mentioned in the announcement that "promote Jinke Shares' strategic restructuring and transformation and upgrading.".
In May of this year, Jinke Group was applied for restructuring by creditors due to failure to repay approximately 27.9 million yuan of commercial acceptance bills on time, which subsequently led to a continuous decline in its stock price. On May 24th this year, after three consecutive trading days with a cumulative deviation of over 20% from the closing price, the stock price of Jinke Co., Ltd. fell below 1 yuan. According to A-share regulations, if the closing price of a listed company's stock is less than RMB 1 for 20 consecutive trading days, the stock may be forcibly delisted, and delisting will also have a significant negative impact on the company's brand, financing, sales, external cooperation and other business activities.
In order to avoid delisting, Jinke Group quickly took action and announced an increase in its holdings. The specific increase was as follows: the controlling shareholder of Jinke Group voluntarily increased their holdings of Jinke Group within six months, with a proposed increase amount of no less than RMB 50 million and no more than RMB 100 million, and an increase price of no more than RMB 1.5 per share. In addition, its directors, supervisors, senior management, and core members voluntarily increase their holdings of company shares with their own funds within 6 months, with a total planned increase of no less than 5 million yuan and no more than 10 million yuan. After the announcement of the above-mentioned increase in holdings was released, the stock price of Jinke Group staged a "ground and sky board" on May 26th.
Regarding the progress of the increase in holdings, the announcement shows that as of the close of June 5th, the cumulative increase in holdings of Jinke Shares by the directors, directors, senior management, and core members was 1.4204 million yuan, and its controlling shareholder's cumulative increase in holdings of Jinke Shares was 19.269 million yuan.
Until June 6th, the stock price of Jinke Co., Ltd. finally exceeded 1 yuan/share, with a closing price of 1.07 yuan/share. Subsequently, on the evening of June 6th, Jinke Co., Ltd. announced the purchase of the aforementioned issued shares, and Jinke Co., Ltd. suspended trading, temporarily maintaining its stock price above 1 yuan/share.
So, does this suspension of trading mean that Jinke Shares has "escaped danger" in the defense battle of delisting?
Liu Shui, Director of Enterprise Research at Zhongzhi Research Institute, stated that in the short term, the measures taken by major shareholders to increase their holdings and load high-quality assets into the market are helpful in enhancing the value of the company's stocks and avoiding a rapid decline in stock prices. In the long run, the company needs to complete debt restructuring as soon as possible, activate existing buildings for guaranteed delivery, accelerate sales collection, and resume operations as soon as possible to avoid delisting.
Public information shows that in the first quarter of this year, Jinke Group delivered a total of 18126 properties, achieving a sales amount of approximately 11.167 billion yuan, a decrease of 47.08% compared to the first quarter of 2022.
