Tuesday's sudden announcement: planned delisting! What's wrong with this A-share company?, Too sudden! Just suspended trading on Monday

Late at night, a rare announcement appeared in A-shares!

On the evening of August 29th, Jingwei Textile Machinery announced that the company plans to voluntarily withdraw the listing and trading of A-shares on the Shenzhen Stock Exchange through a resolution of the shareholders' meeting, and instead apply for transfer in the national small and medium-sized enterprise share transfer system.

Jingwei Textile Machinery is a globally renowned supplier of complete cotton textile equipment, with a market value of nearly 20 billion yuan. Why voluntarily delisting at this time?

Jingwei Textile Machinery plans to voluntarily terminate its stock listing

At around 10:30 pm on August 29th, Jingwei Textile Machinery announced on the Shenzhen Stock Exchange that due to market changes, the company's operations are facing significant uncertainty and may have a significant impact on the company. In order to protect the interests of small and medium-sized shareholders, in accordance with relevant laws, regulations, and normative documents such as the Shenzhen Stock Exchange Listing Rules, and with the proposal of the company's shareholders, Hengtian Group and Hengtian Holdings, and approved by the company's board of directors, the company plans to voluntarily withdraw the listing and trading of A-shares on the Shenzhen Stock Exchange through a resolution of the shareholders' meeting, and instead apply for transfer in the National Equities Exchange for Small and Medium Enterprises.

According to Jingwei Textile Machinery, after applying to the Shenzhen Stock Exchange, the company's stocks will resume trading from the opening of the market on August 30th. It is worth noting that on August 14th, the company's stock price suddenly hit the limit and continued to decline in the following days. Data shows that from August 14th to August 25th, the stock price of Jingwei Textile Machinery fell by a cumulative 19%, with a market value shrinking to 5.7 billion yuan.

Subsequently, on August 28th, Jingwei Textile Machinery announced that its shareholder, Hengtian Group, was planning major matters related to the company, and its stock was suspended from trading starting from August 28th.

The controlling shareholder of Jingwei Textile Machinery is China Textile Machinery Group, and the actual controller is China Machinery Industry Group Co., Ltd. It is understood that the current total share capital of Jingwei Textile Machinery is 704 million shares, of which 523 million are circulating A-shares and 181 million are delisted foreign shares. Among them, China Textile Machinery Group holds 219 million A-shares of Jingwei Textile Machinery, accounting for 31.13% of the total share capital of Jingwei Textile Machinery. Hengtian Holdings holds 172 million delisted foreign shares of Jingwei Textile Machinery, accounting for 24.49% of the total share capital of Jingwei Textile Machinery. Hengtian Group holds 19.01 million A-shares of Jingwei Textile Machinery, accounting for 2.70% of the total share capital of Jingwei Textile Machinery. Zhongfang Machinery Group, Hengtian Holdings, and Hengtian Group are all subsidiaries directly or indirectly controlled by State Machinery Group and are concerted actors.

We will initiate a mechanism to protect dissenting shareholders and other shareholders

Jingwei Textile Machinery stated that in order to fully protect the interests of investors, the company will initiate a mechanism to protect dissenting shareholders and other shareholders. After the voluntary termination of the listing matter through a resolution of the shareholders' meeting is approved by the shareholders' meeting, Hengtian Group will provide cash option rights to all A-share shareholders registered on the registration date, except for Hengtian Group and China Textile Machinery Group.

The provider of this cash option is Hengtian Group, and the applicant is all A-share shareholders registered on the registration date of cash option equity, except for Hengtian Group and China Textile Machinery Group.

In terms of exercise price, the exercise price of the cash option this time is 9.24 yuan/share, which is the arithmetic average of the daily weighted average price for the thirty trading days before the company's board of directors approves the voluntary termination of listing through a shareholder meeting resolution. The company's stock price was 8.05 yuan per share before the suspension of trading.

The equity registration date for this cash option is September 13th, and the declaration method is through the Shenzhen Stock Exchange trading system. The company does not provide manual declaration.

Deducting 238 million shares of the company held by Hengtian Group and China Textile Machinery Group, as well as 215600 shares of restricted or restricted rights held by other shareholders, and 181 million shares of delisted foreign shares. During the declaration period of cash option, Hengtian Group is expected to provide cash option for no more than 285 million shares, subject to the implementation of cash option.

At the same time, Jingwei Textile Machinery also pointed out the risk that if the shareholders' meeting cannot pass the proposal on voluntarily terminating the company's stock listing through the resolution of the shareholders' meeting, the company's A-share dissenting shareholders and other A-share shareholders will not be able to obtain cash options, and the company's A-share dissenting shareholders and other A-share shareholders will not be able to claim any compensation or compensation from the company or Hengtian Group in this regard. If the company's stock price is higher than the cash option price when declaring the exercise of the cash option, the shareholder's declaration of exercising the cash option may harm their interests.

The market value once approached 20 billion yuan

Public information shows that Jingwei Textile Machinery was restructured and established by the state-owned Jingwei Textile Machinery Factory, which was put into construction in 1951. It is a core member of China Hengtian, a backbone enterprise of the Fortune 500 machinery group. In December 1996, the company was listed on the Shenzhen Stock Exchange, and by the end of 2015, its market value had approached 20 billion yuan.

Jingwei Textile Machinery specializes in textile machinery and also operates financial trust business. The company is a leading global supplier of cotton textile full process equipment, with products covering spinning, weaving, twisting, synthetic fibers, and specialized components. Among them, intelligent full process spinning systems and digital twisting systems have global competitiveness. The holding subsidiary of the company, Zhongrong International Trust Co., Ltd., engages in trust business.

In 2022, the total operating revenue of Jingwei Textile Machinery was 11.887 billion yuan, a year-on-year decrease of 4.21%; The net profit attributable to the shareholders of the parent company was RMB 454 million, a year-on-year decrease of 24.42%. As of December 31, 2022, the total assets of the company were 39.238 billion yuan, a year-on-year decrease of 5.58%; The net assets attributable to shareholders of the listed company were 9.895 billion yuan, a year-on-year increase of 5.20%.