November 5th, 3pm.
The report from the third-party evaluation agency was delivered to Chen Wei's desk on time.
Appraiser Zhou sent it in person. He stood in front of his desk and his tone was very calm:
"Mr. Chen, the results are out. The new valuations of the two loss-making projects are 44% lower than the original valuations."
Chen Wei opened the report and his eyes fell on those numbers.
Original valuation: 250 million.
Current valuation: 140 million.
It was more than 30 million lower than she expected.
Appraiser Zhou said:
"The location of these two projects is remote, the surrounding supporting facilities cannot keep up, and coupled with the recent market downturn, the valuation reduction is reasonable.
We retrieved data from five surrounding competing properties and compared the cost structures. This number can withstand scrutiny."
Chen Wei nodded:
"Thank you, Teacher Zhou."
After appraiser Zhou left, she picked up the phone and dialed the number Zhao Chen.
"Chairman Zhao, the evaluation results are out. The valuations of the two projects have been reduced by 44%, and then discounted to NT$10 million as the basic valuation financing.
According to the plan, Lin Wanqing's shares will be diluted to 10%. Her 50 million is now only 20 million."
There was silence on the other end of the phone for two seconds.
Then Zhao Chen said:
"Send her a letter to inform her that we will raise new financing based on a valuation of 100 million."
Chen Wei asked:
"What if she doesn't respond?"
Zhao Chen said:
"Then the agreement will be implemented. The shares will be adjusted and the project will be advanced.
If she doesn't show up again, she will give up automatically."
After hanging up the phone, Chen Wei looked out the window.
Lin Wanqing, you have been missing for eleven days.
What on earth are you waiting for?
November 7, 9 a. m. Henglong Building 28th floor.
When Chen Xi pushed the door in, Su Wantang was massaging Zhao Chen.
"The positions of Zhao Zong and Lu Shen have been updated again."
She put the latest data in front of Zhao Chen:
"As of yesterday's close, 51 million shares of the positions we can check have been sold.
The average cost is about 18.7, based on today's calculation of Opening Price 20.4, the floating loss has exceeded..."
She paused:
"87 million."
Zhao Chen's brow moved slightly.
51 million shares.
87 million floating loss.
Lu Shen is still at Add Position.
"His Short Selling pace never stopped at all."
Chen Xi said, "Two to three million shares a day, untouchable. He seems to be..."
She thought about it:
"It's like he's executing a set plan. No matter how the stock price goes, he sells at his own pace.
Apparently, he didn't want to attract attention.
If it hadn't been for the 5 million shares that were smashed, we wouldn't have known that someone was in Short Selling."
Zhao Chen leaned on the back of the chair and said nothing.
87 million.
This number should be approaching the limit for Lu Shen.
What on earth is he waiting for?
"Keep staring," he said.
Chen Xi nodded and was about to leave when he suddenly remembered something:
"By the way Zhao Zong, there is one more thing today."
Zhao Chen looked at her.
Chen Xi said:
"Yunnan Agriculture Group is meeting today."
Her expression became serious:
"Today is the day when the trial will be held.
I heard that this review is particularly strict. There are a total of 6 companies attending the meeting today, and there are current market rumors that 5 companies may be dropped."
Zhao Chen's fingers tapped lightly on the armrest twice:
"Pay attention to the results. If you have any news, please tell me as soon as possible."
Chen Xi nodded:
"Understood."
At eight o'clock that evening, news about the tightening of listing review had already spread in a small area.
"Today's trial meeting was too harsh. They only criticized 6 companies and rejected 5 companies."
"I heard it was the most strict day in history, and the questions asked were more difficult than the last."
"Yunnan Agriculture Group is also in there? Is there any news?"
"The results haven't come out yet, but it's probably hanging in the balance."
"Their cash transaction ratio is too high, 29%. This is a flaw that cannot be overcome."
"There is also last year's epidemic, 20,000 piglets died, Public Offering Review Committee will definitely ask questions."
"Just wait, there will definitely be an announcement tonight."
On November 8, at one o'clock in the morning, the Securities Regulatory Commission official website released an announcement.
<Announcement of the review results of the 31st meeting of the 17th Public Offering Review Committee in 2017>
"The 31st Issuance Review Committee Meeting of the 17th Issuance Review Committee of the China Securities Regulatory Commission in 2017 was held on November 7, 2017. The review results of the meeting are hereby announced as follows:
Yunnan Agriculture Group (first release) failed.
Key issues of concern during the review include:
1. The issuer has a relatively high proportion of cash transactions, 32.45%, 30.78%, 29.41%, and 28.93% respectively from 2014 to the first half of 2017.
Explain that there are doubts about the authenticity, necessity and verifiability of cash transactions;
2. The issuer purchases raw materials from natural persons, and whether the relevant internal control system is sound and effective;
3. During the reporting period of the issuer, there are large differences between Gross Margin and comparable companies in the same industry, and the fluctuation trends are inconsistent, indicating the rationality;
4. The issuer's ability to cope with extreme situations and its impact on operations was demonstrated by the death of nearly 20,000 piglets due to an epidemic in 2016."
November 8, nine o'clock in the morning.
Chen Xi almost ran into Zhao Chen's office.
"Zhao Zong! The result of Shennong is out!"
She handed the phone to Zhao Chen, and the announcement from Securities Regulatory Commission was displayed on the screen.
Zhao Chen took the phone and looked at it line by line.
cash transaction.
Procurement by natural persons.
Gross Margin difference.
Death from the epidemic.
Every one of them is a flaw.
Every one of them is expected.
He put down his phone and leaned back in his chair:
"Sure enough, I didn't pass."
Chen Xi said excitedly next to him:
"I waited until one o'clock in the morning to wait for the results last night.
When I saw the words 'failed', I almost shouted."
She sat opposite Zhao Chen:
"Zhao Zong, do you know what is the most amazing thing?
Of the 6 companies that attended the meeting today, 5 were actually rejected. Only one passed.
Shennong simply cannot handle this kind of review intensity."
Zhao Chen nodded:
"Expected."
Chen Xi continued:
"And you see, these questions raised by Public Offering Review Committee are all the ones we analyzed at the beginning.
Cash transactions account for 29%, which is the biggest drawback.
There was also the epidemic, although it did not cause major losses, it exposed their risk control capabilities."
She paused:
"Now that Yunnan Agriculture can't be put on the market, Cheng Jiaxun must be anxious. When will we take action?"
Zhao Chen thought for a while:
"No rush. Let him be anxious for a while."
He looked out the window:
"Now when we go to negotiate, he is in a low mood after being rejected and cannot negotiate a good price.
Wait for him a month or two, wait for him to have greater financial pressure, wait for him to figure out that going public is not going to work-"
He turned around:
"It's the best time to talk about it then."
Chen Xi nodded:
"Understood."
She stood up and suddenly remembered something:
"By the way, Zhao Zong, Lu Shen's data hasn't been updated yet.
But according to his pace these days, he should add about 2 million shares today."
Zhao Chen said nothing.
He looked out the window at the blue sky.
Lu Shen in Add Position.
Lin Wanqing is disappearing.
Shennong was rejected.
Three stories, gathered on the same day.
Soon.
Almost there.