Long Xin Holdings embarrassment

¡ö Long-ho staff reporter

Even though the market has been speculation for the "King of potash fertilizer," Long Xin Holdings £Ÿ 000955 £  clear that the major shareholder of the company's lack of confidence.

          Frequently to reduce

 Long Xin Holdings on November 14 issued a notice that the controlling shareholder of Hainan to build China's Trade and Industry Branch in the November 10 to November 13 period, the sale of shares amounted to a total of 1651.83 million shares, accounting for the company's total share capital of 5 .63%.

 On the 10th of this month to build China Hainan Branch of Trade and Industry 1989.83 million shares held by the limited lifting of the ban announced the sale of shares, then 4 days of the Financial shareholders could not wait out the current construction of China Hainan Branch of Trade and Industry with only 338 million shares Outstanding shares.

 The previous August, the second largest shareholder of Beijing Kexin limited investment in the July 3 to August 6 period, the sale of shares amounted to a total of 1484.15 million shares, accounting for the Stoc company's total share capital of 5.06 percent.  As of the close on August 6, Beijing Kexin investment still holds 1515.86 million shares, accounting for 5.17 percent of the company's total equity at the company's second-largest shareholder.

         Sluggish performance

 The company mainly engaged in Spunlace, hot-rolled, the plasma membrane and other non-woven products and their Foreign Exchange processed products after the production and sales, the main business revenue mainly from product-led "Long Xin" brand products and non-woven sheet Sales.

 In 2007, the company even though the main business revenue last year compared with an increase of 3.43 percent, but the losses amounted to 54,240,000 yuan.

In the first three quarters in 2008 net profit -1561.30 million.

 Long Xin Holdings net profit in the first half of -810.57 million for the same period last year dropped by 43.5 percent. The resulting loss of most of the reason is not normal potassium dihydrogen phosphate project due to mass production, products of high fixed costs of production, resulting in greater sales losses.  To that end, holding long-yan said that the company will overcome the financial and technical bottlenecks to raise production company phosphorus chemical products.

         Lack of funds

 The company many times to change into fund-raising.

 Long Xin Holdings in 1999 for the first time through the practical issue of 308,400,000 yuan Prospectus, the Prospectus mainly invest in non-woven production lines.  But the investigation found that the company had not planned to use the project as well as the progress of the Prospectus, but in April 2001 and January 2006 two changes into the Prospectus, a large amount of resources to supplement working capital, planned projects But construction was suspended more. Among them, "spunbond production line" investment 73,450,000 yuan, only the completion of infrastructure and factories of the main building, and investment in the project "construction in progress," the long-term Guazhang subjects, and did not suspend the project benefits.

 In February this year, holding long-yan said the notice, the company proposed to change some of the money raised will be Prior to the remainder of the Prospectus 25,464,400 yuan of funds to all the additional investment Long Yan Yichang New Chemical Materials Co., Ltd. with an annual output of 100,000 tons phosphoric acid Potassium dihydrogen projects.

The 5-year projects were not serious shortage of funds.  According to the company, in January this year to June, the company invested a total of 3,463,300 yuan for Long Xin potassium dihydrogen phosphate chemical technology projects.  As the issue of funding the company has not been resolved, the lack of technological investment, the majority in the original equipment on the basis of the transformation, and the transformation of the request is not supporting the application and, at the same time, as the use of fossil fuels, there have been Increase the concentration of potassium dihydrogen phosphate ingredients more difficult, filtration equipment to increase production capacity to filter a critical lack of new capacity.  The above-mentioned issues led to the transformation of downtime longer than originally planned to be extended.  In addition, throughout the course of reform, as the funds can not guarantee that the cost of the initial trial production needs, which severely restricted the trial production period of production, also affected sales in the first half.

June 27, 2008, the Shenzhen Stock Exchange on Long Xin Holdings of potassium dihydrogen phosphate project in Yichang, "the disclosure of the information is inaccurate, incomplete and not timely and regular basis in the previous report and the interim report, there are misleading statements" on the matter Guo, chairman of the company and the cast to give a public condemnation of the action.  "King of potash fertilizer," unworthy of the name.

 In addition, because of inability to pay this year on March 26 due 74,710,000 yuan in bank borrowings, Yan Long Chemicals no choice but to the Bank of China branch Yidu to apply for debt restructuring.

           In recent years, "deficits"

 Notice that the main raw material in the fourth quarter of a substantial price reduction, lower production costs and actual controllers of the company to build China Hainan Branch Industry and Trade Co., Ltd. and the Company has undertaken to carry out a partial waiver of debt restructuring debt.  As the main raw material prices continued existence of uncertainties, the company owned subsidiary of Yichang City, Long Yan New Chemical Materials Co., Ltd. in the fourth quarter of the trial production losses can not be identified, for which a specific amount of losses the company can not be predicted with certainty.