Oriental Nova: Only 10% "parasitic" mode of big shareholder holding

May 4, Beijing Oriental Xinxing Petrochemical Engineering Co., Ltd. ("Oriental Nova") on the China Securities Regulatory Commission website disclosed prospectuses, the company intends to land in Shenzhen Stock Exchange. However, there are two problems in the company, which makes investors have great doubts about the development prospects of the new Oriental Star market. First of all, the company to China Petrochemical Group ("Sinopec") a single customer over-reliance, which makes people on the future development of the company is full of doubt. Second, the company's actual control of the Chen Huili holding company ratio of only 10.72%, after the IPO, its shareholding will be further reduced to 8.04%, the company's actual control capacity is weak, follow-up if the future development of the company's shareholders are divided or encounter a two-level market malicious hand, Then Chen Huili has doubts about the actual control ability of the company. "Parasitic" in the future of Sinopec if China Petrochemical group in the construction process to reduce the contract to the company, the company's performance is facing great risks. Oriental Nova's IPO prospectus shows that company's main business for the petrochemical industry, the new coal chemical industry large-scale construction projects to provide engineering investigation and geotechnical engineering construction services, service areas include: Engineering survey (including surveying and mapping, reconnaissance, inspection (supervision), geotechnical engineering construction, engineering consulting and supervision. Company income mainly from geotechnical engineering construction and engineering survey. Oriental Nova is intended to open the public issue not more than 25.34 million shares, to raise capital of 183 million yuan, for engineering capacity upgrading and enterprise information construction projects, research and Development center construction projects. Data show that from 2011 to 2013, the Oriental Nova to achieve business income of 529 million yuan, 494 million yuan, 500 million yuan, the net profit is 49 million yuan, 60 million yuan, 56 million yuan respectively. In the performance fluctuation behind, is the Oriental Nova to Sinopec group this customer's over-reliance on. Company prospectus shows that in 2011 the company's top five customers are all Sinopec Group's companies, in 2012 to 2013, the company's top five customers in the top four customers are Sinopec Group's companies. Among them, the company 2013 of the first five customers for SEI (China Petrochemical Engineering Construction Company), Sinopec Group Petroleum Commercial Reserve Co., Ltd. Tianjin Dagang Base Project department, Sinopec Shanghai Engineering Co., Ltd., Sinopec Luoyang Engineering Co., Ltd., Fujian Baling Caprolactam Co., Ltd. In 2012, the first five customers were Sinopec Group Petroleum Commercial Reserve Co., Ltd. Caofeidian (Dock) Base Project department, Sinopec Anqing Branch, China Petrochemical Natural Gas branch Sichuan gas pipeline project Department, China Petrochemical Group Shanghai Engineering Co., Ltd., Zhong Hua Quanzhou Petrochemical Co., Ltd., 2011, The company's top five customers are all Chinese petrochemical Group company, respectively, Sinopec Group Shanghai Engineering Co., Ltd., China Petrochemical Group pipeline storage and transportation company Zhanjiang to Lianjiang Pipeline project Department, China Petrochemical Group pipeline storage and transportation company Beihai crude oil commercial Storage base construction project division, Sinopec Anqing Branch, Pipeline storage and transportation of Sinopec GroupThe company Caofeidian Commercial Reserve Storehouse construction project division. Oriental Nova in the prospectus also frankly, according to the same actual control population diameter statistics, reporting period, the company from China Petrochemical group revenue accounted for the proportion of operating income of 89.37%, 80.64% and 83.02% respectively, there is the risk of income concentration in Sinopec Group. Oriental Nova is the predecessor of China Petrochemical Group Survey and Design Institute, the Department of China Petrochemical group directly under the unit. For the reasons that the company's performance is dependent on Sinopec, the company said that in recent years, China's petrochemical industry investment scale continued to grow, a group of large-scale oil refining project, oil Reserve project has been launched, the duration of the task is heavy, in order to maintain and consolidate with Sinopec Group, a core customer relationship, Companies in the overall business to undertake limited circumstances, the priority to meet the needs of China Petrochemical Group Engineering Construction, the Chinese petrochemical group system outside the business undertaking less, resulting in the reporting period from the Sinopec Group and its associated units of business income accounted for continued to rise. "From the above data can be seen, the main income of the Oriental Nova is from China Petrochemical Group, which means its ' parasitic ' in China Petrochemical Group, in the future if Sinopec Group in the construction process to reduce the company's contract, the company's performance is facing great risks." "A brokerage analyst on the" China Business newspaper, "the reporter pointed out that such an example in already listed companies have precedents, so the former letter-flying business relies on China Mobile's Shenzhou Tai Yue, in China Mobile and its letter of contract from three years to a year, and the introduction of other tenders, The company's performance has fallen sharply in the first quarter of 2014, with the same risk being faced by Oriental Nova. The company also admits that the next few years the company from the Chinese petrochemical Group's income ratio is still high, if the future Sinopec Group on the company's services demand reduction, will have a negative impact on the profitability of the company. The big shareholder's control ability is doubtful if encounter malicious raise card, will be to the company's board of directors and management to cause a major impact, and then affect the company's development. In addition to the performance of excessive reliance on the Chinese petrochemical Group, the market for Oriental Nova's doubts and the company's actual control of the future Chen Hui in the development of the company has no actual control capability. Data show that Chen Huili directly hold 8.1487 million shares of the company, 10.72% of the shareholding, Zhaochi, Cuevimen, Hudwin and other 23 shareholders as the Chen Huili of the unanimous action, Chen Huili and its concerted action of the total holding of 38.36% of the company's shares voting rights, Therefore, the company's sponsoring agencies and distribution lawyers identified Chen Huili is the company's actual control person. November 20, 2011, Chen Huili, Zhaochi, Cuevimen, Hudwin and other 24 natural shareholders signed the agreement: after the signing of this agreement, in dealing with the need to be approved by the Oriental new Star Shareholders General meeting, the Parties agreed to take a concerted action in the meaning of Chen Huili, to make the same expression. However, market participants have deep doubts about this. A private equity official told reporters that although Chen Huili signed the agreement with other shareholders, but such a concerted action agreement will often become an empty piece of paper when the company's shareholders disagree on major issues, although Chen Huili is the real controller in the company's name, but its shareholding is relatively low, and after the IPO succeeds, the proportion of Chen Huili holding company will be further reduced, It is difficult to realize the actual control of the company in the future development. Prior to this issue, Chen Huili Total equity is 76 million shares, the total amount of the proposed public shares does not exceed 25.34 million shares, the total share capital after the issuance of 101.34 million shares, Chen Huili holding company shares will be further reduced to 8.04%. In the listed companies, because the majority of shareholders do not have the actual control of the company, resulting in significant differences in the direction of the company's development, leading to a sharp decline in the company's performance cases abound, which is more typical, such as environmental protection (300156. SZ) Because of the huge differences between shareholders, and its major shareholders do not have the actual control of the company led to the company's development after the great dilemma. "Because the Chen Huili holding company shares is too low, do not rule out the market after the listing will encounter the malicious brand, this situation is common in listed companies, and if the encounter malicious hand, it will be the company's board and management caused a major impact, and then affect the company's development." "The private equity figures further point out that if the future company encounters the market maliciously to raise the card, but the company's control person Chen Huili because holds the company stock too low, its big shareholder position is very vulnerable to be threatened, in this case, its ability to retaliate to ensure its big shareholder status and management stability is still unknown. Once listed, the actual control of the company with low shareholding ratio can coordinate the shareholder relationship? Will the Oriental new star follow the footsteps of China's Tai Yue? This reporter by fax to the Oriental Nova to ask for an interview, the company related personnel just said the interview outline has been transferred to the relevant leadership, but as of press, did not receive a reply.