The price of silicon material has fallen, and the lawsuit is tricky.
Reporter Qian Qin Yi
Editor Tan Lu
With the evolution of the cycle, the business of the richest man in Ningbo has encountered setbacks.
In mid-May, Hesheng Silicon held a performance meeting, 68-year-old Chairman Luo Liguo attended to answer investors' questions one by one.
FreevideopokerslotgamesThe Hesheng silicon industry, which he has worked so hard for many years, is at a crossroads.
In 2023, the company's net profit was 26.Freevideopokerslotgames.23 billion yuan, down 49.05%, falling for two years in a row.
Performance is at a low ebb, and the equity dispute between the company and Fang Hongcheng, the former general manager, has not yet come to an end.
Whether the Luo Liguo family can smoothly cross this cycle is full of uncertainties.
one
The more you sell, the more you lose.
Hesheng silicon industry focuses on new silicon-based materials, photovoltaic new energy, its main business is industrial silicon and silicone, affected by market supply, product transaction prices continue to decline.
"even if [silicon] sells 70,000 to 80,000 per ton, the company can still make money." Luo Liguo made such a statement at the shareholders' meeting.
He believes that by expanding capacity, costs will be lower under economies of scale.
Now it seems that he may have underestimated the powerful impact of cyclical fluctuations in the photovoltaic industry.
According to the financial report, the company's production capacity climbed rapidly in 2023, with an additional 400000 tons of industrial silicon completed and put into production, with an annual production capacity of 1.22 million tons, and an additional 200000 tons of organosilicon, with an annual production capacity of 1.73 million tons.
In terms of operation, take industrial silicon as an example, sales last year were 101.7 tons, an increase of 74.2% over the same period last year, and the average selling price was 13359 yuan, down 24.35% from the same period last year.
In short, there is no increase in fees and charges.
Affected by the price, the gross profit margins of the two main businesses have declined to varying degrees. Industrial silicon is 29.48%, down 6.79 percentage points from the same period last year; organosilicon is 9.37%, down 23.33 percentage points from the same period last year.
Luo Liguo did not respond positively to the question of whether the silicon material in production was losing money, saying only that "he will make use of the existing scale and cost advantage and the integrated synergy advantage of the industrial chain to flexibly respond to various changes in the market."
He also did not give a clear answer as to whether the company's proposed project would continue to be put into production as planned. At the end of 2023, the amount of projects under construction in Hesheng was 38.197 billion yuan, an increase of 127.49 percent over the same period last year.
According to statistics, since 2021, the amount of financing through external channels has exceeded 50 billion yuan, equivalent to 62.5% of the total assets at the end of 2023.
In order to raise funds, at the beginning of 2023, Luo Yan and Luo Shudong paid another 7 billion yuan out of their own pocket to cover the fixed growth of the company. In addition, Luo Liguo and his children have a large number of equity pledges.
two
Equity dispute
Under operating pressure, Hesheng Silicon is caught in an equity dispute with former executives.
Hesheng Silicon was not a family business in its early days. After 2019, one of the shareholders of Fidelity Industries continues to reduce its holdings, Luo family continues to increase its holdings, and finally becomes the actual controller.
According to Tianyan investigation, Ningbo Hesheng Group, Luo Yi, Luo Xidong and Luo Liguo currently own 46.24%, 16.28%, 15.18% and 0.89% of Hesheng Silicon Industry, respectively. And Ningbo Hesheng Group is actually controlled by Roche.
Related to the company's equity, there is also a big dispute. Fang Hongcheng, the former general manager of the company, was embezzled by the position sued by the company after leaving office, and is still in the stage of trial.
Fang Hongcheng said that the Roche family refused to redeem its due equity and took it to court on the grounds of embezzlement.
Fang's family reported Luo Liguo's forgery of official documents.
It can be predicted that these legal disputes will continue to pull.
There are also continuous personnel changes within the company. Last year, Gong Jiping, the company's director, deputy general manager and secretary of the board, resigned.
It is believed that Luo Liguo faces internal and external troubles due to the governance culture of his family business.
At present, Luo Liguo's daughter Luo Yun is the vice chairman of the company, and her son Luo Yudong is the general manager.
Luo Xing, the eldest daughter, once trained in the company's marketing department and rose from grass-roots to management. In 2021, with a wealth of 46.5 billion yuan, she surpassed Wa Zong Fuli to become the richest woman in Zhejiang.
Luo Yidong, a post-90s, has also started from a local company of Hesheng Holdings to serving as an assistant to the chairman of the board.
three
Run blindfolded
Hesheng Silicon Industry's main business is relatively single, mainly rely on silicon production to make money.
Under the development trend of vertical integration of photovoltaic industry, Luo Liguo once laid out the downstream photovoltaic industry chain.
In 2021, he invested heavily in silicon wafers, components, photovoltaic glass and power stations, claiming to be "the most complete silicon-based industrial chain company in the world".
At present, it is difficult for these investments to have an immediate effect on income.
"due to the lack of downstream industrial chain accumulation, the money for selling resource products may not necessarily support the development of the downstream." Said one person in the energy field.
Blindfolded in the past few years, Hesheng silicon industry has a number of projects are still in the investment stage.
By the end of March 2024, the company's industrial silicon inventory was 240000 tons and the cash flow of operating activities was-2.594 billion yuan.
The capital market is not optimistic either.
As of may 17, its share price was down more than 75% from its all-time high in 2021, wiping out 240 billion of its market capitalization.
Luo Liguo's wealth has also shrunk sharply.
This year, with a fortune of 48 billion yuan, he ranked 442 on the Hurun Global Rich list and is still the richest man in Ningbo. Compared with his fortune of 75 billion a year ago, he has lost 1/3.
In difficult times, the company hopes to keep its morale steady.
Luo Liguo plans to buy back the company's shares in 2024, with a total amount of 500-1 billion yuan, mainly for employee stock ownership plans or equity incentives. He also further refined the company's employee compensation system and strengthened corporate governance.
To survive this cold winter, the Roche family will face more tests.
