Due To Lack Of Funds, Red Bean Group'S Overall Listing Died Prematurely

On July 1, 2008, Hongdou Group announced that it had decided to give up purchasing assets from Hongdou Group through non-public offering of shares due to problems such as the municipal planning of the main land to enter the assets in the process of implementing the non-public offering scheme.

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The asset injection, which had been favored by most investors, was abandoned in this way, causing panic among most shareholders, and called the Securities Daily Investor Rights Hotline (010-82031724) to find out why Red Bean Group abandoned its earlier overall listing plan.

Reason 1:

Large amount of funds for land change

Obstacles to the layout of garment industry

It is understood that on December 21, 2007, at the 20th meeting of the third Board of Directors held at Red Bean, the Proposal on the Company's Compliance with the Conditions for Non public Issuance of A-shares and the Proposal on the Company's Plan for Issuing Shares to Purchase Assets were reviewed and passed, It said that the company would issue non-public shares to Hongdou Group Co., Ltd. to purchase the equity of garment companies held by Hongdou Group and related land, housing and other assets.

Public information shows that the clothing assets held by Hongdou Group other than listed companies are mainly operated by the following companies, including Taihu Industry, Hongdouqing Clothing, Bangyi Clothing, Far East Clothing, Hongdou Clothing, Hongge Clothing, Hongdou Jackets, Aimeng Clothing, Taibo Clothing, Hongdou Packaging, and Hongdou Import and Export. The shares issued this time will purchase all the shares of Hongdou Group in the above companies and realize the overall listing of Hongdou Group. In addition, the land and houses purchased are assets related to the Group's clothing companies, mainly the land and houses occupied by the company and the corresponding staff dormitories.

Many investors and institutions believe that the injection of apparel assets of Red Bean Group is a great good news for the future development of Red Bean. Some analysts believe that Red Bean is the leading enterprise in China's textile industry. The overall listing of Red Bean Group will expand the company's scale and bring great imagination for its future performance growth.

However, on July 1 of this year, Red Bean announced that the land use policy of the main land proposed to enter the asset had changed due to municipal planning problems, which caused substantial obstacles to the integrity of the original issuance plan of the company and could no longer be adapted to the strategic development plan proposed by the company. This means that we will give up the plan to purchase assets from Hongdou Group Co., Ltd. through non-public offering of shares. For a while, investors speculated about the reasons for giving up and began to hesitate whether to continue to hold the shares of Red Bean.

On July 7, Meng Xiaoping, Secretary of the Board of Directors of Red Bean, explained in an interview with our reporter that "because the amount of land change accounts for more than 20% of the total assets entered this time, it has caused substantial obstacles to our original layout and planning of the clothing industry, so we will give up the plan."

At the end of 2007, it was determined in the issuance plan of Hongdou Shares that it was planned to issue 100 million shares to Hongdou Group Co., Ltd. in a non-public way to purchase the equity of clothing companies held by Hongdou Group and related land, housing and other assets, so as to realize the full injection of clothing assets of the Group into the listed company. The estimated value of this part of assets is about 830 million yuan.

Relevant people also disclosed that the asset injection plan was delayed later due to various reasons. During this period, the A-share market experienced a significant adjustment. On July 1, the company's share price was only 3.99 yuan, less than half of the proposed issue price. If the original plan is still followed, the loss of major shareholders' interests is really too large.

Guotai Jun'an said in the research report that the "land use policy change" in the announcement has indeed created obstacles to the implementation of the original issuance plan. However, the current low share price is also an important reason for the company to abandon the issuance plan.

Red Bean Group lacks funds for paclitaxel project

The equity of the listed company has been pledged for loans

The abandonment of asset injection by Hongdou shares is like a duck flying in the mouth. It is hard not to say that the losses are serious. After all, once Red Bean shares are issued, its net profit will increase by 60%, net assets per share by 37.07%, and earnings per share by 31.45%. Obviously, there is no reason for Red Bean to let go without reason.

Some market participants speculated that the reason why Hongdou Shares gave up the injection of assets was probably due to the change of the Group's strategic thinking.

Meng Xiaoping also implicitly said that the Red Bean Group only made the decision to give up the plan after taking into account all factors.

Red Bean Group is one of the earliest enterprises operating brand clothing in China. At present, there are mainly "Red Bean", "Acacia Bird", "Yidifi" and other clothing brands. In addition to clothing business, the company also operates real estate, textile and other businesses. In 1993, Red Bean Group began to implement the shareholding system, and in 2001, Red Bean was listed on the Shanghai Stock Exchange.

So far, Red Bean Group is no longer limited to the development of clothing, but continues to expand other fields. At present, the assets of Red Bean Group involve chemical fiber, medicine, finance and other fields. Recently, Red Bean Group has focused on the extraction and production of paclitaxel.