Today, let’s pick up the most miserable listed company’s financial report.
This company is in the financial sector, is one of the few insurance sector companies, it is said that the insurance business is less able to lose money, because the money is too cheap, but this company is an exception:.
In fiscal 2020, the net profit of Westwater was a loss of 8.736 billion, and the net profit after deductions was a loss of 27.123 billion, which is 7.45 times the total market value of the company now at 3.64 billion.
Live long Time to see. Some netizens jokingly said, “Burning money to keep warm are enough to burn for several years”, “a day to burn 10 million hundred yuan bills have to burn more than seven years”. A new 100 yuan RMB note is about 1.15 grams, 100 million RMB is 1.15 tons of weight, 27.1 billion yuan is equivalent to 311 tons of RMB.
How can you lose so much money?
If you understand the past Life of the Westwater shares will not be surprised, it is a famous old demon stock, experienced several big ups and downs.
Originally the company is a cement company in Inner Mongolia, listed after the moderate, but the identity of the listed company is good, so someone did some “long term” arrangements.
From 2010, Westwater began to systematically buy shares of Tianan Insurance, and then the shareholding ratio gradually increased, and news of restructuring began to spread, so from June 2014 to May 2015, just one year, Westwater’s share price rose from more than 8 yuan to 41 yuan, a five-fold increase.
In June 2015, Westwater’s restructuring plan was approved, the cement business was gone and the main business became insurance.
Then the same show came again in 2017, in just 3 months, the share price rose from 14 yuan to 38 yuan.
There has to be a reason for such a rise, right?
Of course there is, at that time Tiananmen Insurance performance is scary good, so Westwater’s 2017 semi-annual report is very bright: the
Operating income of 15.619 billion yuan, up 10.66% year-on-year; net profit of 2.356 billion yuan, up 391 times!
It is strange not to go up, then the question arises, Tian An insurance performance why so good? It seems to have not heard of any explosive insurance products ah?
People’s income is good, mainly because the short-term financial products sold too well, those years is indeed the most beautiful time for insurance companies, typical representatives such as Anbang, the best-selling products are also such products.
But in 2017, the wind suddenly changed, the insurance company sold such products were strictly limited, and then each company began to fall off a cliff, Tiananmen Insurance is no exception, the performance plunged 90%, the stock price fell, the bear 3 years.
In July last year, the share price of Westwater rose again, by 60%, but within a few days, the company threw a big thunderbolt: the trust products held by Tian An Insurance.
Tiananmen Insurance held trust products and other assets expired in substantial default, the corresponding impairment of 57.745 billion yuan.
According to the proportion of equity, Westwater loss 27.1 billion, the announcement, the stock price is certainly finished, the exchange is also anxious, issued two consecutive regulatory work letter requesting an explanation, but Westwater shares are also quite “robust”, until now has not replied to the SSE.
After the disclosure of this big lightning, to the third quarterly report, the loss is gone, many people thought that the West Water shares have any way to make a lot of money to fill the hole, in fact, they just play a little trick of financial reporting, through the bookkeeping to cover the money.
Until the release of the annual report preview in the past few days, everyone finally came back to their senses, piling up to hang sell orders, has been dry for several consecutive stops.
Then why did Tiananmen Insurance step on such a big mine? A loss is more than 50 billion.
Because Tiananmen Insurance external investment in a collection of trust investment plan, all concentrated in a new era of trust, which is not quite normal, the risk is too high.
Then why Tian An Insurance put all the eggs in one basket? To bet on the treasure?
The reason is also very simple, because Tian An Insurance, New Era Trust and Westwater all belong to the MT system of companies.
The MT system is previously the largest domestic financial control group, involving 44 financial institutions.
Historically, they have been very aggressive in their style when it comes to financial institutions.
● In the first phase, from 1998 to 2001, the first wave of agricultural and commercial banks were restructured, and they acquired shares in Baoshang Bank and Taian Bank.
In the second phase, from 2001 to 2004, when A-shares were in a bear market and the financial industry was divided, they acquired a large number of securities and trust institutions such as Hengtai Securities, Pacific Ocean and Xinhua Trust.
●The third stage, from 2005 to 2006, was the wave of capital increase and share expansion of city commercial banks, which took in Harbin Bank and Bank of Weifang.
In the fourth stage, from 2006 to 2009, the company acquired insurance companies, including Tianan Property and Casualty Insurance and Tianan Life, and took the initiative to establish Huaxia Life.
In the fifth stage, after 2010, the company participated in the restructuring of agricultural and commercial banks and took a stake in Shenyang Agricultural and Commercial Bank and Beijing Agricultural and Commercial Bank.
For more than 20 years, the MT system has effectively controlled four listed companies, namely, Tomorrow Technology, Huazi Industry, Xishui and Aisu, through its multiple platforms.
These controlled financial institutions became the cash machines of the MT Department, and with the continuous borrowing of money to buy new assets, the capital grew larger and larger like a snowball, and at one time there were thousands of companies in which it had a stake.
However, the legend of this empire stopped in January 2017. The principals were investigated and assets were disposed of one after another, including the recently bankrupt Baoshang Bank.
Zhou Xuedong, head of the receivership team of Baoshang Bank, revealed in an article in China Finance that since 2005, the MT system has been gradually “hollowing out” Baoshang Bank by means of a large number of improper connected transactions, capital guarantees and capital appropriation, causing serious financial and operational risks and directly infringing on the interests of other shareholders and depositors. The bank was gradually “hollowed out”, causing serious financial and operational risks and directly infringing on the interests of other shareholders and depositors. According to the results of the liquidation, in the 15 years from 2005 to 2019, the MT system registered 209 shell companies and took credit funds in the form of 347 loans, resulting in an amount of 156 billion yuan, all of which became non-performing loans, and the degree of insolvency was beyond imagination.
Baoshang Bank went bankrupt, becoming the third bank in China to go bankrupt, and Tian An Insurance was also put into receivership by the CBRC in July last year, and is doing the work of clearing the assets, what will be the result is yet to be seen.
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