In the mainland has the “king of the hangtag” of the name of the Nanji electric business in the stock market this year since the opening of continuous decline, as of January 12 closing, the stock price has fallen 32%, the market value from the peak evaporated 37.3 billion yuan (yuan, the same below), the reason for the decline is that investors questioned its financial fraud.
Comprehensive mainland media news, NJD started the year unfavorably, on January 4, NJD opened with a flash crash and fell; on January 5, NJD opened with another straight drop.
In the face of heavy setbacks in share prices, the evening of January 5, Nanji Electric released an announcement that it intends to contribute not less than 500 million yuan, not more than 700 million yuan, through the secondary market to buy back the company’s shares, the repurchase price of not more than 15 yuan / share. But the share buyback program thrown out by NJD did not curb the downward momentum of the stock price.
On January 6, again plunged 6%; on January 12, again fell. The stock price has fallen by more than 60% from its all-time high in July last year.
As of the 12th, at 9.23 yuan per share, its share price has suffered seven consecutive trading days of decline, down 10%, and its market value has evaporated 37.3 billion yuan from the peak touched on July 10, 2020.
The reason for the fall in share price, some brokerage firms questioned its financial falsification.
According to the Securities Times, a brokerage report on “Definition and Identification of Surplus Management and Surplus Manipulation” was circulated in the investment market shortly after the start of this year. The report, published by Industrial Securities in 2019, was rehashed again this year, with the report questioning Nanji’s financial falsification.
Although the report did not explicitly name Nanji Electric, the market generally interpreted it as targeting Nanji Electric. The report mentions six major suspicions of falsification, namely very high net profit margins without obvious barriers, no obvious competitors, very asset-light operating model, poor quality financial data, accounts receivable, doubling the scale of operations, but decreasing the number of employees, and highly overlapping suppliers and customers.
In June 2020, according to a news report from the mainland’s “City World” on January 13, First Financial reported that there were several suspicions behind the surge of Nanji’s GMV (total transaction value): the “fighting” between distributors’ sales and GMV performance data; the constant change of operators of many Nanji’s heavyweight stores, or the constant change of registered addresses and names of store operators; the unexplained financial transactions between the company’s upstream and downstream suppliers and distributors, as well as the obvious personnel connections.
In the face of the endlessly falling share price, NJD came out on the 12th to respond to the many questions from the market. In the “clarification announcement on media reports”, NJD especially specified that in response to the recent circulation of questions about the company’s fraud, and from the business model, financial data, operating model, competitors, the number of employees, supplier data and customer overlap, as well as the amount of VAT payable and historical equity pledges and other eight perspectives to respond one by one.
However, registered international investment analyst Zhou Yancong said, “Nanji electric business lacks core competitiveness and the revenue from labeling is unsustainable, so it is difficult to have a breakthrough in such a competitive e-commerce market.”
And before that, Nanji electric business has not responded positively to outside questions, before, Nanji electric business founder Zhang Yuxiang said: “I am doing business, do not care about the stock. We should always care about the stock, this company is not good. Their (investors) psychology I do not have the energy to study.”
Nanji Electric has the name of “King of Hangtags” in mainland China, that is, all its goods are produced by franchised factories, and then affixed with the company’s trademark, implementing the business strategy of brand licensing.
This way of doing business has brought the company huge profits, but because its spread is very large, some netizens say it does not pay attention to product quality.
Netizen “gale” said: “I think when the brand first came out, the quality of Nanjiren’s underwear is very good; but now Nanjiren, is synonymous with inferior products, because he only authorized the label, just pay, regardless of the quality, and do not maintain the brand. Now the brand only has negative value, and soon no one will be willing to post his brand.”
“Wang Binbin”: “In the past, Nanjian had its own factory and brand spirit, but now Nanjian is just a branded assembly line.”
Netizen “in in ac” said that according to this way, Nanjian e-commerce is not far from the line: “Word of mouth started, word of mouth is bad, really everything can be Nanjian. The authorization object threshold is low, and the whole category, Nanji people really difficult to have control over the partner’s products. This kind of business that specializes in selling brands is equivalent to drinking hemlock to quench thirst, and it is estimated that it is not far from the line.”
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