Chengdu Xin Yisheng Communication Technology Co., Ltd. (Xin Yisheng) announced on December 22 that its controlling shareholder, actual controller, and chairman Gao Guangrong were under investigation for alleged “violation of restrictive transfer provisions of shares” as of December 20, 2024.
According to sources from Xin Yisheng cited by mainland media “National Business Daily” on the evening of the 22nd, the notice received mentioned “alleged violation of restrictive transfer provisions of shares,” and they stated, “The specific conclusion will depend on the final outcome, and we will disclose the announcement based on the original content of the notice.”
Lawyer Wang Huaitao from Shanghai Xingu Law Firm stated, “Restriction on stock transfer” refers to certain shareholders holding shares that cannot be transferred within a certain period according to relevant laws and regulations. During the current investigation period, major shareholders are not allowed to reduce their shareholdings.
According to Xin Yisheng’s financial report for the third quarter of this year, Gao Guangrong is the largest shareholder of the company, holding 52.46 million shares, accounting for 7.40% of the total shares. Based on the latest stock price, the market value of the shares held is approximately 6.749 billion yuan.
Reportedly, from January of this year to date, Xin Yisheng’s stock price has nearly tripled. Since the beginning of 2023, the company’s stock price has increased nearly 8 times.
According to mainland media “Titanium Media” on December 23, Gao Guangrong’s most recent reduction of holdings for cash was in the third quarter of 2023, totaling 463 million yuan. Since 2019, Gao Guangrong has been reducing holdings for five consecutive years, with a cumulative cash-out of over 945 million yuan. Since Xin Yisheng went public, shareholders have collectively cashed out over 2.1 billion yuan.
Public information shows that Xin Yisheng is a company based in Chengdu engaged in the sale of computer network equipment and components, established on March 31, 2009.
Xin Yisheng is one of the few companies in China with the capability to deliver high-speed optical module products in batch production. As of the close of December 23, Xin Yisheng’s stock was priced at 124.65 yuan per share, with a year-to-date increase of 158.87%, a TTM price-earnings ratio of 46.38 times, a market capitalization of 88.3 billion yuan, and a value that exceeded a hundred billion yuan earlier this year.
Xin Yisheng’s half-year report for 2024 shows that the annual production capacity of point-to-point optical modules is 9.12 million units, with production in the first half of the year totaling 3.81 million units and sales of 3.27 million units. Titanium Media believes that the company’s production capacity is currently in excess.
Recently, market research firm LightCounting released a latest forecast report for the optical transmission market in October 2024, stating that most suppliers have overflowing orders for the next 12 months, which usually indicates potential risks – even a slight decline in demand could trigger a chain reaction, suggesting that the current growth rate is unsustainable.
On the evening of April 22, 2024, Xin Yisheng released its annual performance report, indicating that the company’s operating income in 2023 was approximately 3.098 billion yuan, a decrease of 6.43% compared to the previous year; the net profit attributable to shareholders of the listed company was about 688 million yuan, a decrease of 23.82%; and the basic earnings per share was 0.97 yuan, down by 23.62% compared to the previous year.