In the news of June 30, 2024, the leading enterprise in the field of lithium battery equipment, known as the “top echelon in the world”, Lihyuanheng, closed at 19.13 yuan (RMB, the same below) on June 28, down 5.81% from 20.31 yuan last week. The stock had reached a peak of 272.13 yuan. Experts believe that with a price drop of 92.5%, thousands of investors have suffered significant losses.
Guangdong Lihyuanheng Intelligent Equipment Co., Ltd. was established on November 19, 2014, and went public on the Shanghai Stock Exchange’s Sci-Tech Innovation Board on July 1, 2021. It issued 22 million shares at a price of 38.85 yuan per share, which skyrocketed to 272.13 yuan a month later. Chinese media referred to Lihyuanheng as one of the advanced enterprises in the top echelon globally in the field of digitalization of lithium battery equipment factories.
As of now, Lihyuanheng’s latest total market value is 2.365 billion yuan, ranking 82nd out of 93 in the battery sector’s market value and 3941st out of 5113 in the A-share market value of the two exchanges.
The stock saw a net outflow of financing of 14.1984 million yuan and a decrease in financing balance; and a net outflow of securities borrowing of 2.1512 million yuan, causing a decrease in securities borrowing balance.
On June 25, Lihyuanheng witnessed a continuous decline for 6 consecutive trading days, leading to a cumulative decrease of 15.46%.
Last year, Chinese media reported that Lihyuanheng’s net profit plummeted by over 90%, even resulting in periods of losses. With the decline in net profit, the company’s asset-liability ratio, inventory, and accounts receivable have been increasing year by year.
In the secondary market, Lihyuanheng’s stock price has been on a continuous decline since the beginning of the year. By the closing of November 22, 2023, the company’s stock price was at 43.45 yuan, down by 2.86%, marking a total decrease of 67.38% from its peak of 133.57 yuan earlier in the year, with a total market value of 5.373 billion yuan. After four cuts, the fundraising amount decreased from 3.3 billion yuan to 1 billion yuan.
Lihyuanheng’s first-quarter report for 2024 showed that the company’s main operating income was 760 million yuan, a decrease of 39.94% year-on-year; net profit attributable to shareholders was negative 188 million yuan, a decrease of 180.95% year-on-year; non-net profit was negative 170 million yuan, a decrease of 146.5% year-on-year; debt ratio was 77.81%, investment income was 291,400 yuan, financial expenses were 24.1329 million yuan, and gross profit margin was 17.38%.
Recently, the continued decline in Lihyuanheng’s stock price has drawn market attention.
A prominent Weibo user “Financial Talk by Li-ge” posted: “Too harsh! Lihyuanheng went from 272 yuan to 20 yuan in 3 years since going public, a drop of 92.5%, leaving investors clueless.”
The article mentions that after a surge to 272.13 yuan, Lihyuanheng’s stock price began its steep decline. Recently, it hit a new low of around 20 yuan, showing no signs of rebound. Investors holding the stock are at a loss with no clear direction ahead.
The article further states that while Lihyuanheng was profitable in the first 2 years after going public, the financial results in the 2023 annual report took a major hit, with a net loss of 188 million yuan. The first-quarter report of this year recorded a direct loss of 187.9 million yuan. Given this trend, it is speculated that by the end of this year, the profits earned in the first 2 years of being listed might not be enough to cover the losses, raising questions about the initial performance during the IPO.
“It was also noted that the number of shareholders increased from 4,600 in the third quarter of 2022 when the stock price was around 150 yuan, to nearly 9,000 currently, with many investors now trapped midway. With so many investors constantly buying in hopes of a price increase, the situation seems bleak, leaving them wondering when this downward trend will take a turn for the better.”