A huge financing plan has made BOE Technology Group Co., Ltd. ("BOE"), which has been listed for more than 10 years, once again at the forefront.
According to its latest announced financing plan, BOE will raise RMB 46 billion for the construction of Xinyi Optoelectronics 8.5-generation line, touch screen production line, Yuansheng Optoelectronics 5.5-generation AM-OLED production line, Chongqing BOE 8.5-generation line and other supplementary liquid funds. .
This day's price financing is equivalent to several times the total financing of BOE in the past few years. Correspondingly, BOE has experienced operating losses five times in six years. After more than 10 years of listing, its cash dividends are even less than 40 million yuan.
"Enclosure", "transportation of interests", "unclear purpose of financing", for a time, the doubts about BOE have come. In this regard, on August 23, Zhang Yu, vice president of BOE Technology Group Co., Ltd. said that BOE is still in the capital investment period, and the deadline will last until around 2015.
Financing while losing money
According to the data, from the time of listing to 2010, BOE's total loss exceeded 6 billion yuan, and the losses occurred in 2005, 2006, 2008 and 2010 respectively.
At the same time, BOE raised RMB 975 million, RMB 1.855 billion, RMB 2.242 billion and RMB 11.783 billion in January 2001, October 2006, July 2008, June 2009 and December 2010, respectively. 8.944 billion yuan, a total of 25.799 billion yuan. Together with the proposed fund of RMB 46 billion in July this year, BOE’s total financing in the past 10 years was about 719.99 billion yuan.
In June 2004 and June 2005, BOE A paid a total of RMB 9,786,600 and RMB 29,275,900, totaling RMB 39,034,500. Since 2005, eight years ago, BOE has not paid dividends, and it has been called "iron cock" by shareholders. According to BOE staff, if the amount of dividends of BOE B since 1997 is calculated, the total amount of BOE AB's dividends is 192 million yuan. In an exclusive interview with this reporter, Zhang Yu said that BOE does have the phenomenon of “more financing and less dividendsâ€.
The dividends were related to the operating conditions of BOE in the past few years. From the end of 1997 to the end of 2000, BOE operated well. After entering the Liquid Crystal Display field in 2001, it acquired two Korean related fields in the same year and in 2003, until the company entered 2004. All are profitable.
However, by 2005, BOE had suffered losses for two consecutive years, and the company achieved profitability from 2007 to the end of June 2008. Then, in July 2008, under the US subprime mortgage crisis, BOE lost 560 million yuan in the first half of the year and lost hundreds of millions of dollars.
After the setback in 2008, BOE did not gradually slow down until 2011, and began to make profits in 2012, achieving a 23% increase in gross profit. In the first half of 2013, BOE's net profit reached 859 million yuan, and the total net profit for the first three quarters is expected to reach 1.3 billion to 140 million yuan.
Zhang Yu said, "If you don't invest in it, BOE's annual report will look good, but after three or five years, BOE is still absent. It is a big question mark."
At the same time, Zhang Yu also stressed that BOE will enhance its profitability and “give investors more income as soon as possibleâ€. In his view, after several years of investment, BOE gradually released its competitiveness, and will not make large investments in the short term. The time node is at least around 2015. According to the opinion of the workshop, BOE will need more than 100 billion investment, Zhang Yu said that "it will not be within five years."
Financing strategy selection
The huge amount of financing of 46 billion yuan, due to the sum of the amount of financing over several years, quickly fermented the market's doubts about BOE to the extreme.
Some opinions questioned that BOE’s motive for financing was unknown, and said that none of the newly issued projects were new projects. For example, the Hefei project and the Chongqing project have been completed and are expected to be opened at the end of this year and the second half of next year. The Erdos project is also nearing completion and production. According to this logic, BOE does not need tens of billions of funds to support these projects.
In addition, taking Xinyi Optoelectronics, which is divided into 46 billion yuan, as an example, the registered capital of the company is 10.05 billion yuan. The revenue from January to March this year is only 89,000 yuan, and the net profit loss is 2,722,400 yuan. BOE holds a 59.97% stake and Hefei BOE holds a 0.05% stake. Xinyi Optoelectronics, which has poor investment in BOE, hopes to take advantage of the market's touch screen production line.
In the past few years, BOE's investment in LCD panel projects has mainly come from private placement financing and syndicated loans, in addition to government investment. Take Beijing's 8.5-generation line investment of 28.03 billion yuan as an example. In this project, 8.5 billion yuan came from local governments, with an additional 8.5 billion yuan, and another 10.5 billion yuan through syndicated loans. The huge capital investment has caused the market to worry that BOE once again falls into the strange circle of “financing after financing, refinancing after lossesâ€.
At the same time, the government's investment support for BOE also attracted market attention. Prior to this, BOE President Chen Yanshun had said that the Hefei Municipal Government invested 10 billion yuan in its 8.5-generation online, and the Chongqing Municipal Government invested 10.8 billion yuan in the 8.5-generation line. The charm of BOE attracts the government to invest so much, and it also pays attention to the market.
In response to the above-mentioned doubts, Zhang Yu said in an exclusive interview with this reporter that 46 billion yuan of funds were invested in “completely new projectsâ€, and Chongqing, Erdos and Hefei were all construction projects. In the early stage, they were mainly built through bank loans. The demand is large, and only through the private placement method, otherwise the bank loan "the interest is too high, the burden of the enterprise is too large."
Another example is Xinyi Optoelectronics, which has poor investment management. Zhang Yu said that Xinyi Optoelectronics is still in the early stage of operation, mainly responsible for the construction of the 8.5-generation line. The company “losses several million yuan, but the construction period is not true. Can not be viewed in the way of normal company operations."
As for the financial cooperation between BOE and the local government, Zhang Yu believes that BOE is seeking government support in a market-oriented manner, and it is not directly funded by the government. “By buying stocks of listed companies, special funds will go into the project.†Zhang Yu stressed that the fundamental reason for obtaining government support is that the state is interested in supporting the industry, from policies to funds and taxes.
Zhang Yu said: "We don't want to adopt this method (designated to issue additional shares), but the objective conditions can only be selected." "Foreign industry funds are long-term, in the country, looking for angels to find private placements (in words) , (they) can't do it for the basic and invested industries."
In addition, "the state has a lot of regulations and restrictions on the issuance of bonds. The profit of the year must be higher than the interest paid in order to issue corporate bonds. We are losing money ourselves. If this is not the case, only the private placement will be able to get the money."
On August 26, Zhu Chao, deputy dean of the School of Finance of the Capital University of Economics and Business, said in an interview with this reporter that the government has a strategic willingness to support enterprises like BOE, and BOE’s billion-dollar capital operation equipment production line is doomed to be short-term profit. Too fast, for long-term projects requiring long-term funding considerations, angel funds or private placements, venture capital and other magnitudes, high costs, etc. can not meet BOE. This is the main reason why BOE chose to raise funds from the stock market by means of private placement.
Zhu Chao said that BOE did not communicate well with investors. "Why don't you invest in so many other companies, so your investment is so much questioning? Investors are full of doubts, BOE is full of grievances, and finally can't give in to each other, it will affect the long-term business. Decision-making, if the company changes its investment decisions under pressure, the final impact is the investors themselves."
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
According to its latest announced financing plan, BOE will raise RMB 46 billion for the construction of Xinyi Optoelectronics 8.5-generation line, touch screen production line, Yuansheng Optoelectronics 5.5-generation AM-OLED production line, Chongqing BOE 8.5-generation line and other supplementary liquid funds. .
This day's price financing is equivalent to several times the total financing of BOE in the past few years. Correspondingly, BOE has experienced operating losses five times in six years. After more than 10 years of listing, its cash dividends are even less than 40 million yuan.
"Enclosure", "transportation of interests", "unclear purpose of financing", for a time, the doubts about BOE have come. In this regard, on August 23, Zhang Yu, vice president of BOE Technology Group Co., Ltd. said that BOE is still in the capital investment period, and the deadline will last until around 2015.
Financing while losing money
According to the data, from the time of listing to 2010, BOE's total loss exceeded 6 billion yuan, and the losses occurred in 2005, 2006, 2008 and 2010 respectively.
At the same time, BOE raised RMB 975 million, RMB 1.855 billion, RMB 2.242 billion and RMB 11.783 billion in January 2001, October 2006, July 2008, June 2009 and December 2010, respectively. 8.944 billion yuan, a total of 25.799 billion yuan. Together with the proposed fund of RMB 46 billion in July this year, BOE’s total financing in the past 10 years was about 719.99 billion yuan.
In June 2004 and June 2005, BOE A paid a total of RMB 9,786,600 and RMB 29,275,900, totaling RMB 39,034,500. Since 2005, eight years ago, BOE has not paid dividends, and it has been called "iron cock" by shareholders. According to BOE staff, if the amount of dividends of BOE B since 1997 is calculated, the total amount of BOE AB's dividends is 192 million yuan. In an exclusive interview with this reporter, Zhang Yu said that BOE does have the phenomenon of “more financing and less dividendsâ€.
The dividends were related to the operating conditions of BOE in the past few years. From the end of 1997 to the end of 2000, BOE operated well. After entering the Liquid Crystal Display field in 2001, it acquired two Korean related fields in the same year and in 2003, until the company entered 2004. All are profitable.
However, by 2005, BOE had suffered losses for two consecutive years, and the company achieved profitability from 2007 to the end of June 2008. Then, in July 2008, under the US subprime mortgage crisis, BOE lost 560 million yuan in the first half of the year and lost hundreds of millions of dollars.
After the setback in 2008, BOE did not gradually slow down until 2011, and began to make profits in 2012, achieving a 23% increase in gross profit. In the first half of 2013, BOE's net profit reached 859 million yuan, and the total net profit for the first three quarters is expected to reach 1.3 billion to 140 million yuan.
Zhang Yu said, "If you don't invest in it, BOE's annual report will look good, but after three or five years, BOE is still absent. It is a big question mark."
At the same time, Zhang Yu also stressed that BOE will enhance its profitability and “give investors more income as soon as possibleâ€. In his view, after several years of investment, BOE gradually released its competitiveness, and will not make large investments in the short term. The time node is at least around 2015. According to the opinion of the workshop, BOE will need more than 100 billion investment, Zhang Yu said that "it will not be within five years."
Financing strategy selection
The huge amount of financing of 46 billion yuan, due to the sum of the amount of financing over several years, quickly fermented the market's doubts about BOE to the extreme.
Some opinions questioned that BOE’s motive for financing was unknown, and said that none of the newly issued projects were new projects. For example, the Hefei project and the Chongqing project have been completed and are expected to be opened at the end of this year and the second half of next year. The Erdos project is also nearing completion and production. According to this logic, BOE does not need tens of billions of funds to support these projects.
In addition, taking Xinyi Optoelectronics, which is divided into 46 billion yuan, as an example, the registered capital of the company is 10.05 billion yuan. The revenue from January to March this year is only 89,000 yuan, and the net profit loss is 2,722,400 yuan. BOE holds a 59.97% stake and Hefei BOE holds a 0.05% stake. Xinyi Optoelectronics, which has poor investment in BOE, hopes to take advantage of the market's touch screen production line.
In the past few years, BOE's investment in LCD panel projects has mainly come from private placement financing and syndicated loans, in addition to government investment. Take Beijing's 8.5-generation line investment of 28.03 billion yuan as an example. In this project, 8.5 billion yuan came from local governments, with an additional 8.5 billion yuan, and another 10.5 billion yuan through syndicated loans. The huge capital investment has caused the market to worry that BOE once again falls into the strange circle of “financing after financing, refinancing after lossesâ€.
At the same time, the government's investment support for BOE also attracted market attention. Prior to this, BOE President Chen Yanshun had said that the Hefei Municipal Government invested 10 billion yuan in its 8.5-generation online, and the Chongqing Municipal Government invested 10.8 billion yuan in the 8.5-generation line. The charm of BOE attracts the government to invest so much, and it also pays attention to the market.
In response to the above-mentioned doubts, Zhang Yu said in an exclusive interview with this reporter that 46 billion yuan of funds were invested in “completely new projectsâ€, and Chongqing, Erdos and Hefei were all construction projects. In the early stage, they were mainly built through bank loans. The demand is large, and only through the private placement method, otherwise the bank loan "the interest is too high, the burden of the enterprise is too large."
Another example is Xinyi Optoelectronics, which has poor investment management. Zhang Yu said that Xinyi Optoelectronics is still in the early stage of operation, mainly responsible for the construction of the 8.5-generation line. The company “losses several million yuan, but the construction period is not true. Can not be viewed in the way of normal company operations."
As for the financial cooperation between BOE and the local government, Zhang Yu believes that BOE is seeking government support in a market-oriented manner, and it is not directly funded by the government. “By buying stocks of listed companies, special funds will go into the project.†Zhang Yu stressed that the fundamental reason for obtaining government support is that the state is interested in supporting the industry, from policies to funds and taxes.
Zhang Yu said: "We don't want to adopt this method (designated to issue additional shares), but the objective conditions can only be selected." "Foreign industry funds are long-term, in the country, looking for angels to find private placements (in words) , (they) can't do it for the basic and invested industries."
In addition, "the state has a lot of regulations and restrictions on the issuance of bonds. The profit of the year must be higher than the interest paid in order to issue corporate bonds. We are losing money ourselves. If this is not the case, only the private placement will be able to get the money."
On August 26, Zhu Chao, deputy dean of the School of Finance of the Capital University of Economics and Business, said in an interview with this reporter that the government has a strategic willingness to support enterprises like BOE, and BOE’s billion-dollar capital operation equipment production line is doomed to be short-term profit. Too fast, for long-term projects requiring long-term funding considerations, angel funds or private placements, venture capital and other magnitudes, high costs, etc. can not meet BOE. This is the main reason why BOE chose to raise funds from the stock market by means of private placement.
Zhu Chao said that BOE did not communicate well with investors. "Why don't you invest in so many other companies, so your investment is so much questioning? Investors are full of doubts, BOE is full of grievances, and finally can't give in to each other, it will affect the long-term business. Decision-making, if the company changes its investment decisions under pressure, the final impact is the investors themselves."
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
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