On the evening of October 19, Ningbo Huaxiang Electronics Co., Ltd. (hereinafter referred to as “Ningbo Huaxiang”), a domestic automotive electronics company, staged a “treasure” operation and distributed a cash dividend of 2.004 billion yuan (tax included). The huge dividend value exceeds the total net profit of the company in the past two years. As soon as the announcement came out, the shareholders were collectively boiling, and some investors even said: “Moutai is not so arrogant!”
Ningbo Huaxiang’s generous operation of dividends this time is really shocking. You must know that Ningbo Huaxiang’s net profit in 2020 is only 849 million, and one dividend is close to two years of profits. At the end of the third quarter of this year, Ningbo Huaxiang’s cash on account was only 3.121 billion, and this dividend has consumed more than 60% of the funds.
(From company announcement)
According to the content of the announcement, the company plans to distribute a cash dividend of 32 yuan (tax included) for every 10 shares to all shareholders based on the company’s total share capital of 626,227,314 shares on September 30, 2021, for a total of 2.004 billion cash dividends Yuan (tax included), no bonus shares will be given, and the capital reserve will not be converted into share capital, and the remaining undistributed profit of 3.081 billion yuan will be transferred to the next phase of distribution.
The amount of dividends exceeds two years of profits
This dividend plan shocked the market. On the one hand, the amount of dividends is huge. According to Ningbo Huaxiang’s past performance reports, the company’s net profit from 2016 to 2020 was 714 million yuan, 798 million yuan, 732 million yuan, and 981 million yuan respectively. And 849 million yuan, the performance is relatively stable. During the period, the company’s total dividends were only 681 million yuan. And this dividend plan has far exceeded the company’s 2020 plus net profit of 1.792 billion yuan in the first three quarters of this year, which is equivalent to dividing all the money caught in the past two years, and an additional 200 million yuan will be paid. On the other hand, the timing of the dividend distribution plan in the third quarter is not only a precedent for Ningbo Huaxiang to distribute dividends in the third quarter report before, but also extremely rare in the A-share market. In addition, since Ningbo Huaxiang’s actual controller Zhou Xiaofeng and his spouse Zhang Songmei directly and indirectly hold 29.49% of Ningbo Huaxiang, they can obtain at least about 590 million from the 2.004 billion dividends Yuan.
It is worth noting that although the amount of dividends is close to two years of profits, Ningbo Huaxiang still said that considering the stable sales relationship between the company and the OEM, and the payment collection period has not changed, this profit distribution will not affect the company’s daily operations. , R&D investment, etc.
According to OFweek, Ningbo Huaxiang was established in 1988 and listed on the Shenzhen Stock Exchange in 2005. It is a multinational group company specializing in the design, development, production, sales and after-sales service of mid-to-high-end passenger car parts. The global headquarters Located in China, it has branches in North America, Europe, and South Asia. It has more than 60 production bases and 3 regional R&D centers around the world, with more than 15,000 employees. The company’s main customers include: Volkswagen, BMW, Ford, GM, Jaguar Land Rover, Mercedes-Benz, Toyota, Volvo, Shanghai Auto, FAW Car, Dongfeng Nissan, etc.
The net profit attributable to the parent in the third quarter was 299 million yuan
Ningbo Huaxiang also announced the report for the first three quarters of 2021. The report shows that the company’s operating income in the third quarter of 2021 was 4.398 billion yuan, a year-on-year decrease of 2.59%; the net profit attributable to the parent was 299 million yuan, a year-on-year increase. 4.97%; basic earnings per share of 0.48 yuan. The first three quarters realized a net profit of 943 million yuan, a year-on-year increase of 55.05%.
Ningbo Huaxiang said that the net profit related indicators increased by more than 30% compared with the same period last year, mainly because the impact of the epidemic last year was low, and the reorganization of German Huaxiang was completed, resulting in a significant decrease in losses compared with the same period last year. 2. The net cash flow from operating activities decreased by 32.9%, mainly due to the early payment by the OEM last year, which resulted in less payment in the first half of this year. Meanwhile, Volkswagen’s contract price negotiation resulted in a late pricing and the payment was affected.
Just this month, Ningbo Huaxiang invested 46.25 million yuan to acquire a 75% stake in Shanghai Yirui. It is reported that Shanghai Yirui was originally a wholly-owned subsidiary of Shanghai Chexiang Technology Industry Co., Ltd. (a wholly-owned subsidiary of SAIC Motor). After the completion of this transaction, Ningbo Huaxiang and Shanghai Chexiang held 75% and 25% of the shares respectively. Shanghai Yirui is a high-tech enterprise mainly engaged in the research and development of auto parts. It has strong module development capabilities, especially in terms of Electronic appliances. The completion of the transaction will effectively improve the research and development capabilities of Ningbo Huaxiang’s new products, especially in the “smart seat warehouse”. “Equally partial software is partial to electronic products.
What should Ningbo Huaxiang consider for a split of two years of net profit?
The industry is also full of doubts about this. After all the net profit in the past two years has been completed, what is Ningbo Huaxiang’s plan? According to the opinions of Ningbo Huaxiang’s independent directors, since Ningbo Huaxiang was listed in 2005, the business scale and operation of the company have achieved rapid development. In the past 16 years, the company’s total operating income has increased by 43 times, net profit has increased by 52 times, and undistributed profits have increased from 0.0. 7.8 billion to 5.722 billion yuan (calculated based on the audited financial data by the end of 2020). In the past 16 years, the company’s shareholders have provided a total of 3.453 billion yuan of raised funds, providing valuable financial support for the development of the company. At present, the automobile industry is undergoing profound changes, and the trends of “intelligence” and “new energy” have been established. With the advancement of the non-public offering of shares this year, the corporate governance structure will be further improved, and Ningbo Huaxiang is facing the opportunity of rapid development again. .
In addition, the opinions of independent directors also stated that in order to increase shareholder returns and implement the company’s “2021-2023 shareholder return plan”, the company plans to distribute profits in the first three quarters of 2021. This profit distribution plan complies with laws and regulations such as the “Notice on Further Implementing Issues Concerning Cash Dividends of Listed Companies”, and the relevant provisions of the company’s articles of association. It fully considers investors’ demands for reasonable returns, and takes into account the funds needed for the development of listed companies. demand, there is no situation that damages the profits of companies and investors, especially small and medium investors. We agree to submit this distribution plan to the company’s general meeting of shareholders for deliberation.
It is worth noting that on February 9 this year, Ningbo Huaxiang announced the plan for the non-public issuance of shares in 2021. It plans to issue shares to Ningbo Fengmei Industrial Co., Ltd. controlled by the controlling shareholder and actual controller Zhou Xiaofeng by way of non-public issuance. No more than 188 million shares, the issue price is 12.31 yuan per share (after adjustment), and the total amount of funds raised does not exceed 2.313 billion yuan. On August 25, the application for this non-public offering of shares was approved by the China Securities Regulatory Commission. In other words, after the dividend of 2.004 billion yuan this time, Ningbo Huaxiang may soon have more than 2 billion yuan on its account.
According to the company’s recent announcement, this profit distribution plan still needs to be submitted to the company’s second extraordinary general meeting in 2021 for deliberation on November 4, and it can be implemented after approval. There are still uncertainties. What is the final situation? OFweek Veken The net will also keep an eye on it.