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Listed companies on the Chinese stock market are forced to suspend share trading after three years of losses, said the China Securities Regulatory Commission, adding that they would be allowed to apply for trading resumption if it became profitable again in the first half year of the suspension.
Under the current accounting standards in the country, the company's net profit was minus in 2006. And in the following year, it suffered a loss of CNY 802.9 million. It means that as long as it could begin profiting in 2008, it would still float its shares on the stock market later. But even this aim seems a little bit far beyond the company's reach.
Days ago, it reported a sales revenue of CNY 1.165 billion and a gross profit of CNY 45.96 million for the first half of 2008, plunging 24.2% and 51.39% from a year earlier. And its net profit was minus CNY 412 million, due to capital shortages and massive product stockpiles. Besides, Lv Dong, secretary of the company's board, said that it would become profitable in the first half of 2009 at latest.
However, if its share trading was suspended, Amoi Electronics would face more problems in the fields such as fundraising and borrowing. In fact, since the beginning of 2008, the company has been in an effort to solve capital shortages.
In the first half, it transformed many of its subsidiaries responsible for sale into regional marketing centers, which are engaged in franchising presently, compared to direct supply of products to other franchisers earlier. And the move reduced its operational cost to a large extent.
At the beginning of July, it borrowed CNY 550 million from Amoi Electronics Company, its biggest shareholder, as well as China Electronics Corporation (CEC), its actual controller. And it offered a counter-guarantee to CEC with its equipment, trademark rights and a certain number of shares in its subsidiaries in exchange for the CNY 770 million capital.
On August 7, the listed company passed the plan of selling six properties to CEC for 64.8811 million, a property to China Electronics Smart Card Co., Ltd. for CNY 14.1488 million, and another property to Wuhan Zhongyuan Electronics Group Co., Ltd. for CNY 5.1302 million.
In addition, it will launch 17 mobile phone versions in the second half, including one with the brand name of Red Cliff, the name of a recent John Woo film, according to insiders. But they added that franchisers seemed not interested in the products, because they have been conditioned to direct supply in the past.
From www.hexun.com, Page 1, Monday, August 11, 2008 info@SinoCast.com
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