In the ever-changing stock market, some companies have successfully counterattacked and even become industry giants through clever equity structure adjustments; while some companies have missed development opportunities and even fallen into the quagmire of recession due to adjustment errors.
On September 3, 2024, Shengneng Group (2459.HK)'s performance in the stock market was undoubtedly one of the most tragic cases. This once-glorious stock suffered a heavy blow after the Hong Kong Securities and Futures Commission named the highly concentrated equity. The stock price plummeted by more than 99% during the intraday trading, and the market value dropped sharply from more than 20 billion Hong Kong dollars to less than 200 million Hong Kong dollars.
Shengneng Group's stock price plummeted, like a bolt from the blue. Until then, a few months ago, Shengneng Group was still a dazzling star in the stock market. From April to August, in just four months, the stock price rose more than five times, and the market value once exceeded 23 billion Hong Kong dollars. This company was not only included in the MSCI Hong Kong Small Cap Index and the Hang Seng Composite Index, but also attracted the attention of a large number of investors.
However, behind the adjustment of the equity structure, there is a fatal crisis. The highly concentrated equity structure has caused the market to have great doubts about the future control and management stability of Shengneng Group. This wrong adjustment eventually made the company pay a heavy price.
So, when adjusting the equity structure, can every company grasp it accurately? Why do some companies successfully transform in this link, while others are in trouble?
1. Key steps in equity structure adjustment: How to identify potential risks in the shareholder structure?
Equity structure adjustment sounds like a simple technical operation, but in fact it involves a wide range of areas and is full of complexity. Every detail in the shareholder structure may become a potential risk point, especially when the equity is highly concentrated or overly dispersed. For example, power games between shareholders, uneven distribution of control rights, conflicts between shareholders, etc., may become "time bombs" in the company's development process.
How to identify these potential risks?
First, we need to conduct an in-depth analysis of the background of shareholders, especially the intentions and long-term goals of major shareholders. Secondly, we need to examine whether the relationship between shareholders is stable and whether there is a potential conflict of interest. Finally, it is also crucial whether the key management maintains a good cooperative relationship with the major shareholders. Through this series of analysis, enterprises can effectively identify potential risks in the shareholder structure and provide precise direction for equity structure adjustment.
However, it is far from enough to do this alone. The real challenge often appears in the "implementation" stage of equity structure adjustment. In this process, some enterprises ignore long-term stability in pursuit of short-term interests, resulting in overly radical or imperfect adjustment plans, thus missing the opportunity for development.
2. Missed key steps: Detailed explanation of the reasons for the failure of equity adjustment of Na Shengneng Group
Take Shengneng Group as an example. Its equity structure has shown a trend of centralization in the rapid development of just a few months. Although this move initially promoted the rapid rise of stock prices, the unreasonable adjustment of the shareholder structure has buried huge hidden dangers.
Specifically, Shengneng Group's highly concentrated controlling rights have led to the market's over-reliance on its controlling structure. Once there is a change in shareholders or instability in management, it is easy to cause a sharp drop in the company's valuation.
Similar to Shengneng Group, many listed companies have made similar mistakes when adjusting their equity structures. Especially when facing mergers and acquisitions, financing or capital restructuring, companies often tend to ignore the profound impact of shareholder structure on market valuation.
When the shareholder structure is unreasonable, the market's confidence in the company will often be shaken, leading to a drop in stock prices, and may even affect the company's overall strategic planning.
It can be seen that the adjustment of the equity structure is not only an internal management issue, but its response in the external market should not be ignored. If the company ignores the potential problems in the shareholder structure, it may eventually fall into a vicious cycle of falling stock prices and shrinking market valuations.
3. Goheal's solution: How to help companies get out of the dilemma of equity structure adjustment
Faced with the potential risks in the equity structure adjustment, how to avoid falling into the dilemma of Shengneng Group? This is a question that many listed companies urgently need to answer.
Here, American Goheal M&A Group (hereinafter referred to as: Goheal) provides companies with a complete set of equity structure adjustment solutions to help companies achieve "asset appreciation" in the complex equity structure adjustment process.
Goheal's solution mainly helps companies get out of the dilemma of equity structure adjustment through the following aspects:
1.）Accurate shareholder structure assessment
Goheal will identify potential risk points in the shareholder structure through in-depth market analysis and shareholder structure assessment. Through accurate risk assessment, help companies formulate reasonable equity structure adjustment plans to avoid the risks brought by blind adjustments.
2.）Customized equity plan design
Goheal will combine the company's strategic goals and market positioning to tailor an equity structure adjustment plan to ensure the optimization of the shareholder structure while taking into account the company's long-term development. This plan not only focuses on the balance of power among shareholders, but also takes into account the capital market's acceptance of the equity structure to ensure that the company can gain the trust of the capital market after the adjustment.
3.）Resource integration and value-added
Equity structure adjustment is not only about the distribution of power among shareholders, it also involves the integration and optimization of resources. In helping companies in the adjustment process, Goheal will maximize the return on shareholders' investment and realize the value-added of corporate assets through the integration and optimization of resources.
4.）Strengthen shareholder communication and management
Goheal will also help companies strengthen communication between shareholders and management to ensure stability during the shareholder structure adjustment process.
This is crucial to prevent shareholder conflicts and the emergence of unstable factors, and can effectively avoid the imbalance of equity structure caused by conflicts between shareholders, which in turn affects the company's stability and market valuation.
4. Conclusion: The strategic importance of equity structure adjustment
Equity structure adjustment is one of the key links in the development of listed companies. It involves not only the game of interests between shareholders, but also the strategic layout and market prospects of the company. Any small mistake may lead to a sharp drop in the company's market valuation, or even endanger the company's survival.
Therefore, equity structure adjustment is not just a simple financial operation, but a strategic decision that determines the future fate of the company. The company cannot ignore any details in this process, should avoid risks as much as possible, and seize every opportunity to enhance market value.
