Yingtang Zhikong abandons low-profit business, net profit may increase by 25% to 50% in the first half of the year

On July 7, Yingtang Zhikong, which is introducing state-owned capital, disclosed its 2019 semi-annual performance forecast. The company expects to make a profit of 113 million yuan to 135 million yuan in the first half of 2019, an increase of 25.23% to 49.61% over the same period last year.

Yingtang Intelligent Control stated that the main reason for the performance change was that in the context of a relatively poor macroeconomic environment in the first half of the year and trade frictions that had a certain impact on the demand of some downstream customers, due to high financing costs (financial expenses in the first half of 2019 are expected to be around 100 million yuan), the company gave up some low-profit businesses and shifted funds to high-profit businesses. At the same time, through measures such as divesting loss-making holding companies, reducing fees and increasing efficiency, the company's performance has achieved steady growth, with both operating income and net profit setting historical highs for the first half of the year. The net profit of its great-grandson company, United Chuangtai Technology Co., Ltd., increased by more than 250% year-on-year.

In addition, in the first half of this year, Yingtang Intelligent Control estimates that the impact of non-recurring gains and losses on net profit will be approximately RMB 24 million, which is close to one-sixth of the net profit.

Yingtang Zhikong emphasized that if the state-owned strategic investors are successfully introduced, the company's financial costs will be expected to be greatly reduced. In October last year, Yingtang Zhikong issued a package deal announcement including the "Plan for Non-public Issuance of Shares" and the "Conditionally Effective Share Transfer Framework Agreement". The company plans to issue no more than 210 million shares to SEG Group and raise no more than 2.1 billion yuan; of which 1.2 billion yuan will be used to acquire 100% of the equity of Geelytong Electronics, and the remaining 900 million yuan will be used to supplement working capital. At the same time, the controlling shareholder and actual controller Hu Qingzhou will transfer 54 million shares to SEG Group by agreement, so that the number of shares held by SEG Group in the end will not be less than 264 million shares, and it will become the company's largest shareholder, realizing the transfer of controlling rights.

At present, Yingtang Intelligent Control has received a notice from SEG Group that SEG Group has received the "Approval of Shenzhen State-owned Assets Supervision and Administration Commission on SEG Group's Acquisition of Yingtang Intelligent Control's Controlling Interests" issued by Shenzhen State-owned Assets Supervision and Administration Commission on the same day. The acquisition case still needs to be approved by the China Securities Regulatory Commission.