Who is short selling? Pay attention to the time point at the end of the month. On the first day of listing, there was a sudden surge in margin trading

A securities lending transaction has attracted attention.

Currently, a topic about "Jindi Group's restricted shares being sold through margin trading on the first day of listing" has sparked heated discussions in the market. According to margin trading and securities lending data, on the first day of its listing, Jindi Shares sold 4.5832 million shares through margin trading, with a margin trading balance of 221 million yuan, accounting for 9.346% of the circulating market value. Afterwards, the company's stock price continued to decline, with the latest closing price falling by a cumulative 45% from the highest price on the first day of listing.

Based on the stock price performance of Jindi Shares since its listing, the margin trading on the first day of listing may be profitable. This has also sparked intense discussions in the market, with some investors commenting that the restricted asset management plan has been sold through margin trading, resulting in a continuous decline in new shares after listing; Some market insiders also pointed out that the significant fluctuations in the stock price of Jindi Shares on the first day of listing may be related to a large amount of securities lending and selling.

So, who sold Jindi Shares on a large scale on the first day of listing?

On the first day of listing, a huge amount of margin trading was unexpectedly discovered

Currently, a topic about "Jindi Group's restricted shares being sold through margin trading on the first day of listing" has sparked market discussions and once surged to the snowball "hot stock list".

On September 15th during trading, the stock price of Jindi Shares fell to 32.82 yuan, reaching its lowest point since going public. Compared to the highest point of 61 yuan on the first day of listing, the cumulative decline exceeded 46%, and the latest total market value was 7.318 billion yuan.

The sharp drop in stock price has led to significant floating losses for some investors. In this context, more and more investors are linking the sharp drop in the stock price of Jindi Shares to the sale of securities through margin trading.

According to margin trading and securities lending data, on the first day of its listing, Jindi Shares sold 4.5832 million shares through margin trading, with a margin trading balance of 221 million yuan, accounting for 9.346% of the circulating market value. On each subsequent trading day, there were still securities lending sales, but the sales volume did not exceed 500000 shares. As of the close on September 15th, the margin of margin trading of Jindi Shares was 3.5422 million shares, with a margin trading balance of 118 million yuan.

This means that the net selling of securities lending by Jindi Shares is mainly concentrated on the first day of listing.

Short selling is a type of leveraged trading where investors can borrow securities from securities firms, sell them at a high price, and then buy them back at a low price to earn profits when they believe that the stock price of a certain stock will fall in the future.

Based on the stock price performance of Jindi Shares, the margin trading on the first day of listing may yield substantial profits.

This has also sparked intense market discussions. Some investors commented that the restricted asset management plan was sold through securities lending, resulting in a continuous decline in new shares after listing; Some market insiders also pointed out that the significant fluctuations in the stock price of Jindi Shares on the first day of listing may be related to a large amount of securities lending and selling.

It is worth mentioning that Jindi Shares only had 49.0395 million shares in circulation, but on the first day of margin trading, they sold as many as 4.5832 million shares. Analysts have pointed out that the source of short selling securities on the first day of listing may come from shareholders of restricted shares.

According to the announcement of Jindi Shares, the number of shares to be publicly issued for the first time is 54.776667 million, with an issuance price of 21.77 yuan per share, and will be conducted through three methods: strategic allocation, offline issuance, and online issuance.

Among them, the number of strategic allocation shares issued is 4700871, accounting for 8.58%. The subscribers of this portion of shares are the employee shareholding platform Jindi Shares Asset Management Plan No.1 and No.2, with a 12 month restricted period. These two asset management plans mainly involve the establishment of special asset management plans for senior executives and core employees of the issuing company.

The difference between the number of strategic allocation issuances and the net selling volume of securities lending on the first day is only over 100000 shares.

Article 20 of the Implementation Measures of the Shanghai Stock Exchange for Securities Lending and Lending Transactions stipulates that the types of securities that can participate in securities lending include: firstly, unrestricted tradable shares; The second is the stocks obtained by investors participating in the strategic allocation of initial public offering stocks under the registration system within the promised holding period; The third is other securities that comply with regulations. During the promised holding period, strategic investors shall not lock in the proceeds of the allotment of stocks, implement profit transmission, or seek other improper benefits through collusion with securities lending borrowers or other entities.

It is understood that securities companies also strictly manage securities lending borrowers and do not allow related parties of strategic investors to sell related securities during securities lending to prevent related parties from transferring profits.

According to a report from the Shanghai Stock Exchange, staff members of the securities affairs representative of Jindi Group stated that the shares held by the company's board of directors, senior executives, core technical personnel, and strategic investment asset management plans are all subject to lock periods and have been registered with Zhongdeng Company, and will not be sold.

In addition, Jindi Shares responded on the Shanghai Stock Exchange's e-Interactive platform that the company has registered its restricted shares in a systematic manner in accordance with regulations; It is understood that there is no situation where the major shareholder transfers funds to related parties or institutions for securities lending.

It is worth mentioning that according to data from China Securities Finance, on September 1st, the highest rate of securities lending and lending for Jindi Shares reached 28.1%, and the lending contracts were all 27 day terms, meaning that the contracts would expire on September 28th and must be returned on the same day.

Zhang Cuixia, Chief Investment Advisor of Jufeng Investment, believes that according to relevant rules, restricted shares of strategic investors can only be lent to China Securities Finance Corporation, which will include these stocks in the securities lending pool for use by unspecified entities. Therefore, it is not possible to determine the specific identity of the securities lending party unless thorough research is conducted.

Previously indicated the risk of overestimation

Jindi Co., Ltd. is a company mainly engaged in the research and development, production, and sales of precision mechanical components. Based on precision stamping technology, it comprehensively develops and applies various processes such as laser cutting, CNC precision machining, injection molding, and precision casting, forming two main categories of products: bearing cages and automotive precision components.

The actual controllers of Jindi Shares are Zheng Guanghui and Zhao Xiuhua, who held a total of 77.7% of the company's shares before this issuance, and are in a controlling position; After going public, the company holds a total of 58.28% of the shares and remains in a controlling position.

According to the prospectus, in the first half of this year, Jindi Group achieved a revenue of 574 million yuan, a year-on-year increase of 5.36%; Realized a net profit attributable to the owners of the parent company of 89.9856 million yuan, a year-on-year increase of 17.29%; The net profit after deducting non expenses was 68.711 million yuan, a year-on-year decrease of 6.36%.

It is worth mentioning that Jindi Shares mentioned in the risk warning in its listing notice that its P/E ratio is higher than the industry average. As of August 18, 2023, the average static P/E ratio of the industry released by CSI Index Co., Ltd. for the past month was 32.22 times, while the diluted P/E ratio for the issuer before and after deducting non recurring gains and losses in 2022 was 41.68 times, whichever is lower.

On the first day of listing, Jindi Group's highest increase was 175.61%. As of the close of the day, the increase was still as high as 121.73%, closing at 48.27 yuan per share, further increasing the company's P/E ratio. As of the close on September 15th, the P/E ratio of Jindi Shares was 52.42 times.