"Mengguli Soars 37x on Debut; Hengrui Group Reaps Rewards"
Two trading halts set a nearly one-year record for price increase, and Mengguliang became the new "internet celebrity" on its first day of listing. The actual controller of this new "internet celebrity" is the father and son duo, Cui Genliang and Cui Wei. At present, the "Hengtong System" led by the Cui family already has several listed companies under its control.
On August 9, Tianjin Guoan Mengguliang New Material Technology Co., Ltd. (hereinafter referred to as "Mengguliang") was listed on the Growth Enterprise Market of the Shenzhen Stock Exchange with an issue price of 5.32 yuan, raising 309 million yuan. The stock price once soared by nearly 3700% during the trading day, setting the record for the largest increase for new stocks this year.
As of the closing, Mengguliang closed up 1742.48%, with a market value of 45.1 billion yuan. The dragon and tiger list data shows that four institutions sold a total of nearly 20 million yuan, and the top five buying positions were all from the Lhasa Securities Business Department of Oriental Fortune.
According to the prospectus, the actual controllers of Mengguliang are the father and son, Cui Genliang and Cui Wei. In recent years, the "Hengtong System" created by the Cui family has been active in the capital market, and the listing of Mengguliang also means that the "Hengtong System" has added another listed platform to its territory.
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It is worth noting that before being acquired by the "Hengtong System," Mengguliang was once controlled by the listed company CITIC Guoan, and Rongsheng Mengguliang was also controlled by CITIC Guoan before. Not long ago, Geng Jianming injected Rongsheng Mengguliang into Rongsheng Development, which temporarily eased the delisting crisis of Rongsheng Development.
The strongest new stock of the year, Mengguliang's stock price increased by 3700% during the trading day.
On August 9, Mengguliang landed on the Growth Enterprise Market. The stock price opened sharply higher in the morning, and the fluctuations intensified in the afternoon. The stock price once soared by 3699% during the trading day, setting the record for the largest increase for new stocks on their first trading day this year.
As of the evening closing, the company's stock price was reported at 98.02 yuan per share, with an increase of 1742%, and the market value was reported at 45.05 billion yuan. According to the highest price of 202.15 yuan during the trading day, one can earn a maximum of 98,415 yuan per lot.
Looking at the dragon and tiger list data for that day, among the top five buying positions, all seats were taken by the "Lhasa Army" under Oriental Fortune, and they bought a total of nearly 63.5 million yuan of Mengguliang stocks.
In the top five selling positions, four institutional special seats sold a total of nearly 20 million yuan of Mengguliang stocks. In addition, Zhongtai Securities Shanghai Huayuan Shiqiao Road Securities Business Department also ranked with a net selling amount of nearly 9.4 million yuan.It is reported that the company originally planned to raise 700 million yuan, but with an issue price of 5.32 yuan per share, the actual total funds raised were only 309 million yuan, which were planned to be used for the industrialization project of 10,000 tons of lithium-ion battery cathode materials per year.
Perhaps because the issue price of Mengguli was too low, the amount of funds raised failed to reach the expected level, thus providing a greater opportunity for speculation by new speculative funds.
According to the prospectus, Mengguli's main business is the research and development, production and sales of lithium-ion battery cathode materials, with the main products being cobalt acid lithium and ternary materials. The company entered the lithium battery cathode material market in 2000, and after nearly twenty years of accumulation in research and development, production and sales, it has become one of the main lithium battery cathode material enterprises in China.
In terms of performance, from 2020 to 2022, Mengguli achieved operating income of 1.646 billion yuan, 2.827 billion yuan and 3.234 billion yuan respectively; the net profit attributable to the parent company was 80 million yuan, 105 million yuan and 92 million yuan respectively. In the first quarter of 2023, the revenue was 610 million yuan, a decrease of 37.53% compared with the same period last year; the net profit after deducting non-recurring gains and losses was 13.392 million yuan, a decrease of 36.48% compared with the same period in 2022.
The capital game of "Hengtong System"
Looking at the equity structure from the prospectus, Hengtong New Energy holds 38.67% of the shares, Han Yongbin holds 6.53%, Taizhou Ruizhi holds 6.13%, Lu Chunquan holds 4.98%, Yindi Investment holds 4.26%, Ningbo Honglai holds 4.11%, and Zhonghuan Blue Sky holds 4.03%. The actual controller of Hengtong New Energy is Cui Genliang and his son Cui Wei.
Public information shows that Hengtong New Energy is a wholly-owned subsidiary of Hengtong Group Co., Ltd. (hereinafter referred to as "Hengtong Group"). Hengtong Group is 100% held by Cui Genliang and his son Cui Wei.
As a local leader in Suzhou, Hengtong Group is the largest system integrator and network service provider in the domestic fiber optic communication and smart grid fields, ranking among the top three in global fiber optic communication, with four listed companies.
Although Hengtong Group only has two shareholders, Cui Genliang and Cui Wei, its investments cover 64 companies in various fields, with a very extensive capital layout. Among them, Hengtong Group is also the largest shareholder of Sunan Bank with a 6.93% stake.
In addition, through Hengtong New Energy, the father and son have also extended their reach to the upstream and downstream industries of new energy battery cathode materials and new energy vehicle components.Previously, MGL acquired a 19% stake in Hubei Jiangchen. This company specializes in ternary precursors and cathode materials for batteries, ensuring a stable supply of precursors and achieving cost reduction and efficiency improvement; in 2020, Hengtong New Energy strategically invested in Suzhou Zhongxin New Energy, becoming the second-largest shareholder.
In addition to MGL, Hengtong Group has also invested in Han Ye Shares. In October 2022, Han Ye Shares acquired a 51% stake in Hengtong Copper Foil, a subsidiary of Hengtong Group, for 81.6 million yuan in its own funds, and in February of this year, Hengtong Group became the controlling shareholder of Han Ye.
A series of capital deployments have made the Cui father and son extremely wealthy, ranking 1067 on the "2023 Hurun Global Rich List" with a fortune of 21 billion yuan, ranking ninth in Suzhou, Jiangsu.
It is worth noting that before being acquired by the "Hengtong System," MGL was once controlled by the listed company CITIC Guoan, and Rongsheng MGL was also once controlled by CITIC Guoan.
It is reported that Rongsheng MGL, Tianjin MGL, and Beijing MGL were all affiliated with CITIC Guoan, established in 2002, with the main business being the research and industrialization of lithium-ion power batteries for new energy vehicles, lithium-ion batteries for energy storage, and key materials for lithium-ion batteries.
Risks and challenges of ternary materials
According to the prospectus, the company is currently mainly focused on the field of lithium battery cathode materials, among which the market share of cobalt acid lithium products in consumer electronics batteries has reached 8%. In fact, the company's strategic focus is gradually shifting to the much-anticipated field of ternary materials.
With the vigorous development of the new energy vehicle industry, the market demand for ternary materials is becoming more and more vigorous, and MGL is just seizing this unique and forward-looking business opportunity.
The prospectus shows that all the funds raised by MGL will be used for the industrialization project of 10,000 tons of lithium-ion battery cathode materials per year, further increasing the company's ternary cathode material production capacity.
At present, MGL has accumulated considerable achievements in the fields of Ni3 series, Ni5 series, Ni6 series, and Ni8 series, and these products are widely used in the fields of power batteries for new energy vehicles, electric bicycles, electric tools, etc.In the field of power batteries, MGL (Meng Gu Li) has established solid cooperative relationships with well-known battery companies such as EVE Energy, Lishen, and BYD, and has obtained supplier certification from CATL (Contemporary Amperex Technology Co., Limited).
It is expected that by 2023, MGL's comprehensive production capacity will reach 34,900 tons/year, with ternary materials accounting for 64% of the capacity. Currently, orders from the company's top five customers have contributed more than 70% of the company's revenue.
Relevant data indicates that by 2025, the market size of China's ternary materials is expected to exceed 166.5 billion yuan, highlighting its potential and market prospects.
However, despite the promising outlook, MGL's expansion strategy also faces some uncertainties. Industry experts have expressed concerns about the market substitution risks that may arise from potential changes in battery technology, which could negatively impact the company's competitiveness and profitability.
In response, MGL stated that it will strive to become a leading domestic supplier of high-end lithium-ion battery cathode materials. The company aims to rank among the top three in sales of high-voltage lithium cobalt oxide and to be in the first tier of high-nickel materials as part of its development goals.