Does Fullsun International have a new story?

Zebra Consumer Yangzhe

In the past three years, under the leadership of the young Pan Haoran, Fullsun International has been unable to achieve a turnaround in performance, but instead has plunged deeper into a liquidity crisis.

Recently, the company decided to give up control through restructuring. How will the potential acquirer, Shun An Group, tell a new story?

The highest increase after resumption of trading is up to 200%.

Yesterday, Fullsun International's resumption of trading encountered a big surge. The stock price rose 80% before the market, reaching HK$0.018. After the opening, it quickly fell back to HK$0.03. At the close, it closed at HK$0.02, with a daily turnover of HK$13.3 million and a total market cap of HK$0.227 billion.

The sharp rise in stock price is likely related to a restructuring item disclosed by the company over the weekend.

On the evening of May 13th, the company announced that it has recently entered into terms with potential investors and plans to restructure the company. The latter will provide the company with $20 million for the issuance and subscription of shares, with the subscribed shares accounting for 90% of the company's expanded issued share capital. The proceeds will be used for the debt plan's cash consideration of HK$5 million, and the balance will be used to pay for the restructuring costs and the operating capital of the company's Chinese subsidiary.

If the restructuring is completed, it is expected that the potential investors will own 75% of the company's shares and become the controlling shareholder.

Giving up control of the company is a move born out of necessity for Fullsun International, mainly due to the dire financial situation.

According to the annual report, as of the end of 2021, the total amount of overdue unpaid loan principal and interest was 2.695 billion yuan. At the same time, the company's bank balance and cash totaled only 0.277 billion yuan.

In terms of easing liquidity, the company actively raised funds by selling its assets. In June of last year, it sold the property assets of Phase 3 of the Hong Kong Kowloon Enterprise Square for 0.79 billion Hong Kong dollars; it also mortgage the 49% equity of its subsidiary, Hunan Fullsun, to Daye Trust, indirectly obtaining financing, but this is far from enough.

At the end of last year, the company's net capital liability ratio was 268.1%, and the total amount of default loans, cross-default loans, and related interest payable was 3.023 billion yuan.

The creditors have long been restless. In March of this year, due to the company's failure to repay principal and interest of 0.071 billion Hong Kong dollars, Silver Fortune Hong Kong filed a winding-up petition with the Bermuda Supreme Court.

Becoming an abandoned child

Fullsun International is the brother company of Shimao Group and the only listed platform that Pan Weiming's family has high hopes for.

At the end of 2017, Shimao Group was in full swing, and Pan Weiming acquired Youwei International in a reverse acquisition deal worth 1.511 billion Hong Kong dollars. At the time of listing, the company's stock price was 1 Hong Kong dollar, and at its peak, its market cap was 15 billion Hong Kong dollars.

At that time, Youwei International was a company specializing in fashion design and manufacturing.

Yewei International listed on the main board of the Hong Kong Exchange in 2000. With the booming development of China's e-commerce retail business, the company's ready-to-wear retail business has been impacted and its performance has been mediocre, barely maintaining.

After Pan Weiming took over, the company was renamed Fullsun International and was regarded as the input ground for Fullsun Group's high-quality assets.

At the beginning of the shell listing, Fullsun Group injected 6 project assets in Changsha into the company. Although the company has since entered the markets of Ningde, Fuzhou, Jiaxing, Shanghai, Zhongshan, and Hong Kong, with a total of 15 developing and ready-for-sale projects and a total construction area of 1.1407 million square meters, the Changsha project is still the top priority.

As of the end of 2021, the company has 10 projects in Changsha, including Qinlong Xuefu, Xingru Jincheng, and Kela Meili Resort, with a total construction area of 0.8088 million square meters, accounting for 85.43%.

In addition, the company owns a large number of investment properties in Changsha, with a total construction area of 45,705 square meters, accounting for 99.48%. Last year, the company received rental income of 1.24 million yuan, mainly from the Changsha Fullsun International Financial Center.

It is worth noting that the above-mentioned projects were mainly injected into the listed platform by Fullsun Group before 2019, and have made little progress in the land market since then.

In September 2019, the debt crisis of Fullsun Group emerged, and Pan Weiming gave all his shares in Fullsun International to his son, Pan Haoran. However, during Pan Haoran's nearly 3 years of running the company, the operation has been basically stagnant.

From 2019 to 2021, the company achieved revenue of 1.596 billion yuan, 1.165 billion yuan, and 2.2 billion yuan respectively, with net income attributable to shareholders of 0.137 billion yuan, -1.367 billion yuan, and -580 million yuan respectively.

For two consecutive years of huge losses and debts like Mount Tai pressing down, it has reached a situation similar to the lightning strike of Fullsun Group in 2019.

The acquirer is Shun An Group.

Through this restructuring, the shell of Fullsun International may change hands again. According to the company's disclosure, the potential acquirer is Jinbang Investment.

Jinbang Investment is an indirectly wholly-owned subsidiary of Shun An Group, and the ultimate shareholders of Shun An Group are Kan King Yee Karen, Lun Shunhua, Tan Shenning, who hold 31.96%, 25.60%, and 23.6% of the company's equity, respectively. and three other individuals jointly hold 18.84% of the company's equity.

Shun An Group's main business is securities and asset management, equity bonds, and financial lending in Hong Kong.

According to publicly available records, this financial company has previously assisted Sem Holdings and China Automotive New Retail in bond issuance and share related business.

Similar to companies like Shun An Group, they often operate in the Hong Kong shell market, and if they are lucky, they can make substantial profits. Taking over Fullsun International may involve such tactics.

The change of ownership of Fullsun International means that the Pan Weiming family has once again lost its only listed platform after the financial collapse of Fullsun Group and the sale of Shimao.

After taking over, how can Shun'an Group with a financial background tell a new story?

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