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Scientific and technological innovation board listing application is deferred for the first time in the new year Trina Solar faces questions about whether the controlling stake is stable

来源: 中国证券报 07:59, January 9, 2020 Source: China Securities Journal

□ Reporter Yang Jie

Shipment ranks among the top in the industry

The prospectus shows that Trina Solar's main businesses include photovoltaic products, photovoltaic systems and smart energy. Among them, photovoltaic products include R & D, production and sales of single- and polycrystalline silicon-based photovoltaic modules; photovoltaic systems include power station business and system product business; smart energy includes photovoltaic power generation and operation and maintenance services, intelligent microgrid and multi-energy system development And sales and energy cloud platform operations.

Trina Solar said that the company's photovoltaic module power and battery conversion efficiency are in the leading position in the industry, and the brand has a high awareness in the industry. During the reporting period, the company's total shipments remained stable at the forefront of the industry. According to the shipment ranking data released by the consulting company IHS, the company's shipments from 2016 to 2018 are among the top three in the world.

As early as 2006, Trina Solar was listed on the New York Stock Exchange. In 2010, Trina Solar's net profit reached a record high of 2.063 billion yuan. As the photovoltaic industry entered the "cold winter", Trina Solar's performance declined. In March 2017, Trina Solar delisted from the NYSE and completed the removal of the red-chip structure.

The prospectus disclosed that the actual controller of the company was Gao Jifan. Gao Jifan was born in 1965. He is a Chinese national and has the right of abode in Singapore. Gao Jifan controlled 48.07% equity of Trina Solar through direct and indirect control. Among them, it directly holds 20% of the shares, indirectly through its control of Panji Investment, Qinghai Investment and Trina Xingyuan holds 22.58% of the shares. Changzhou Tianchuang, Wu Chunyan, and Youzhe Technology jointly control 5.49% of the equity of the company. Gao Jifan and Wu Chunyan are married.

In February 2017, Gao Jifan and Xiamen International Trust signed a "Trust Loan Contract", which stipulated that Xiamen International Trust loaned 4.569 billion yuan to it, the loan period was 60 months, the annual interest rate of the loan was 6%, and the loan purpose was to increase the company's shares. From 2017 to 2022, the interest settlement date is June 20 and December 20 each year. The last period of interest and principal will be paid when the loan is due. Trina Solar stated that as of the signing date of the response letter of the review center, Gao Jifan had paid interest on schedule, and there had been no defaults for overdue repayments. If it cannot repay the loan on time in the future, there is a risk that the company's equity held by the controlling shareholder and actual controller may be frozen and disposed of by the creditor, and it will have a significant adverse impact on the stability of the company's equity structure.

R & D investment ratio declines

Financial data shows that from 2016 to 2018, Trina Solar achieved operating revenues of 22.594 billion yuan, 26.159 billion yuan and 25.054 billion yuan, respectively, and net profits of 530 million yuan, 588 million yuan and 573 million yuan, respectively. According to the above data, the company experienced a double decline in revenue and net profit in 2018.

Trina Solar stated that in 2017, due to the rapid development of the domestic market of the photovoltaic industry and higher demand in foreign markets, the company achieved better operating performance. In 2018, the overall demand of the photovoltaic industry declined, and due to the impact of exchange rate fluctuations, the company incurred a large amount of hedging losses and exchange losses in that year, and its operating performance declined year-on-year.

The company pointed out that photovoltaic power generation will enter the era of parity on-grid, and its dependence on policies will gradually decrease. However, at this stage, the photovoltaic industry is still greatly affected by industrial policies. Macro-control policies and measures on photovoltaic installed capacity, subsidy scale and subsidy intensity will directly affect the company's operating performance. It does not rule out that future performance decline due to changes or adjustments in photovoltaic industry policies Due to the implementation of globalization of production capacity layout and globalization of market sales, the company's overseas operations will be affected by factors such as politics and economic environment; in the future, if R & D investment cannot be converted into technical results or the company's technical results conversion effect does not meet expectations, the industry Market fluctuations and falling product prices will adversely affect the company's production and operations, leading to the risk of decline in performance.

Trina Solar has a high proportion of overseas business. In the first half of 2019, the company's overseas revenue accounted for 67.25% of the total revenue. The company stated that overseas production and sales are affected by factors such as market environment, legal environment, tax environment, regulatory environment, political environment, exchange rate changes, and other related overseas operating risks.

Trina Solar said that the company's overall operation in 2019 is good, and its operating income and net profit have maintained steady growth with the expansion of sales scale. According to preliminary calculations, it is estimated that the operating income for the whole year of 2019 will be 23.1 billion to 25.4 billion yuan; the net profit attributable to shareholders of the parent company is expected to be 561 million to 62 million yuan, an increase of 0.55% to 11.13% year on year; After recurring gains and losses, the net profit attributable to shareholders of the parent company was 587 million to 548 million yuan, an increase of 4.51% to 15.38% year-on-year.

Trina Solar's R & D investment is declining. From 2016 to 2018, R & D investment was 1.233 billion yuan, 1.205 billion yuan, and 968 million yuan, and R & D investment accounted for 5.46%, 4.6%, and 3.86% of revenue, respectively.

The Listing Committee put forward a number of audit opinions

This time, the Science and Technology Board Listing Committee put forward a number of audit opinions on Trina Solar.

First, the company is required to further explain how to ensure that the company's controlling interest is not affected if the actual controller Gao Jifan violates the provisions of the Trust Loan Contract, and explain the reliability of relevant commitments and measures.

On November 27, 2017, Gao Jifan, Panji Investment and Qinghai Investment registered the pledge of all the shares in the company they held. Later, due to the need for issuance and listing, all parties completed the pledge release procedure on April 17, 2019.

The Listing Committee requires the company to explain whether the above arrangements for lifting the pledge guarantees meet the state's requirements for risk management of trust institutions; whether the commitments made by the trust institutions are legal and valid. If the negotiation fails at that time, is there any possibility that the couple's shareholdings of the actual controller are frozen and disposed, and how to ensure that the controlling right of the actual controller will not be adversely affected; does the "Trust Loan Contract" stipulate that the actual controller will be in breach of the loan purpose Responsibility for early repayment in such cases.

At the same time, the Listing Committee requested the company to further clarify whether, in the presence of legal flaws in project land and operating houses, in addition to the economic compensation commitments made by the actual controller, have it completed the procedures for the transfer of management rights related to collective land, Whether other measures have been arranged to ensure that there is no material adverse impact on the company's operations and assets.

The prospectus shows that as of June 30, 2019, Trina Solar had a number of outstanding lawsuits. Among them, the four lawsuits as defendants involved a possible loss of nearly 218 million yuan. The Listing Committee stated that the company did not consider accruing related estimated liabilities and asked the company to indicate whether this operation was in compliance with the requirements of corporate accounting standards.

In response to the transfer of 100% equity of Changzhou Tianru, including 19 photovoltaic power plants, by Trina Solar to Yuansheng Investment for RMB 1.854 billion on May 9, 2018, the Listing Committee requested the company to explain that it would transfer 19 power plants to a fund Commercial nature of the company, the rights and obligations of GP and LP and risk sharing of Yuansheng Investment, whether it is debt financing, and whether there is an association between the company and the GP of the fund.

The transaction between Trina Solar and Yuansheng Investment is also the focus of inquiry. The prospectus shows that Yuan Sheng Investment is a company controlled by Industrial Bank through Industrial International Trust Co., Ltd. and Industrial Guoxin Asset Management Co., Ltd.

The Listing Committee pointed out that as of June 30, 2019, the company's balance of accounts receivable related to renewable energy subsidies was 290 million yuan. Among them, the subsidy income of nine power stations has not yet entered the national subsidy list. The Listing Committee requires the company to disclose the details of the subsidy income that has not yet entered the national subsidy list, and explain whether the recognition of the income meets the requirements of corporate accounting standards and whether the corresponding provision for bad debts is sufficient.

In addition, the company's acquisition of Nclave generated goodwill of 140 million yuan. The Listing Committee requested the company to further explain the basis on which it is expected that Nclave's sales revenue will increase by 2.4% -39% during 2019-2023, and disclose whether the impairment test of goodwill meets the requirements of corporate accounting standards.

On January 8, the Shanghai Stock Exchange disclosed the results of the first review meeting of the Science and Technology Board Listing Committee in 2020, and decided to suspend Trina Solar's initial application for listing. Sanyou Medical's initial application for listing was approved.

Trina Solar's listing board was accepted on May 16, 2019, after three rounds of inquiries. Trina Solar is a total solution provider of photovoltaic smart energy. The company intends to raise 3 billion yuan this time for the 250MWp photovoltaic power generation project in Yixing County, the leading base of Tongchuan photovoltaic power generation technology, the 3GW high-efficiency single crystal cut half-module project with an annual output, R & D and information center upgrade construction projects, and supplementary working capital. Judging from the current situation, plus Trina Solar, there have been 3 companies whose applications for listing on the science and technology board have been deferred. The other two companies that have deferred the review have not yet disclosed the retrial news.

Source: China Securities Journal

(Responsible editor: Wei Jingting)


China Economic Network statement: Stock market information comes from cooperative media and institutions, is the author's personal opinion, is for investors' reference only, and does not constitute investment advice. Investors do so at their own risk.
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Scientific and technological innovation board listing application is deferred for the first time in the new year Trina Solar faces questions about whether the controlling stake is stable

来源:中国证券报 2020-01-09 07 : 59Source : China Securities Journal
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