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Helpless move! MLCC inventory depreciation, Fenghua Hi-Tech sales subsidiary 80% equity

Since 2017, the passive components represented by MLCC have led the price increase. In the peak period of price increase in 2018, compared with before, the original MLCC has increased several times. The MLCC in the spot market has increased 15-25 times, and the price of some high-capacity MLCC has increased even more.

However, since this year, the price of passive components represented by MLCC has fallen rapidly.

Recently, industry sources revealed that MLCC price is only better than the level when it started to rise in 2017, and resistance is back to the starting point.

According to the industry, there is still no long-term stable demand for MLCC and no significant recovery in shipments. The market view for the second half of the year is still relatively conservative. Whether the whole MLCC market will recover remains to be seen.

As a representative manufacturer of MLCC in China, Fenghua Hi-Tech Co., Ltd. was driven by shortage price increase in 2018. Its revenue was 4.58 billion yuan, up 36.5% year on year.

However, since this year, Fenghua Hi-Tech is no longer in good shape. It has also sold the control rights of its subsidiary, NaiTe Technologies, for 600 million yuan.

Premium sale of 80% stake in NETEC

Established in 2004, the company focuses on FPC (Flexible Circuit Board) products, which are mainly used in smartphone camera module, LCD panel, wearable smart devices and other fields.

In 2015, Fenghua Hi-Tech acquired 100% stake in NETEC for 592 million yuan.

In 2018, after the three-year performance commitment period, the net profit of NEPT declined sharply, and the goodwill impairment of 148 million yuan was carried out. It was also exposed that the product quality problem was involved in the lawsuit with Shunyu Photoelectric.

On December 20, 2018, Shunyu Photoelectric filed a lawsuit against NETEC for 40.305 million yuan in respect of product quality. Up to now, the case is still in trial and has not yet been closed.

In the face of these problems, it seems that NETEC has become a hot potato. The company also lost 6.88 million yuan in the first quarter. Can Fenghua Technologies successfully find a "catcher"?

Suspected of breaking the law, big changes in senior executives

It is noteworthy that Fenghua Hi-Tech has its own pending case investigation.

On August 7, 2018, Fenghua Hi-Tech received the Notice of Investigation from CSRC. The CSRC decided to file a case for Information Disclosure Violation of securities laws and regulations.

According to the relevant provisions, if Fenghua High Technologies is therefore subjected to administrative punishment by CSRC, and is found to constitute a major illegal act in the decision on administrative punishment, or transferred to the public security organ in accordance with the law for the suspected offence of violating the rules and disclosing or not disclosing important information, the company will be involved in the illegal situation of major information disclosure and the company's stock trading will be affected. Execute delisting risk warning.

However, nearly a year has passed, and the SFC's investigation of Fenghua Gaoke is still under way, and no conclusive opinions have yet been reached. But the company's high-level changes have not stopped.

In 2019 alone, four executives announced their departure.

Among them, Lai Xu, who is also the chief financial officer, vice president and director, resigned and left after less than two years as the chief financial officer. Another vice president, Zhang Yuansheng, resigned in April.

In addition, the chairman of the board of supervisors, supervisors, staff supervisors and other three people have also left their posts.

Prior to the investigation, Fenghua Gaoke also received a warning letter from the Guangdong Supervisory Bureau of the Securities Regulatory Commission to the company and its six current or current directors and executives.

The warning letter shows that Fenghua Hi-Tech's major accounting errors resulted in a reduction of net returns to its mother by 52.795 million yuan in 2016.

Guangdong Regulatory Bureau pointed out that Xing Jianchao, then chairman of Fenghua Hi-Tech, Wang Jinquan, current president and Liao Yongzhong, then financial director, should bear the main responsibility for these major accounting errors.

Liao Yongzhong, the former financial director of Fenghua High Tech, left his post as early as July 2017.

Nowadays, in the market of MLCC inventory depreciation, Fenghua Hi-Tech wants to maintain continuous growth of its performance. It is a helpless move to sell the disfigured performance of NET.

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