Fenghua Hi-Tech announced on the evening of August 7 that the company was investigated for suspected violation of the law. Previously, Fenghua Hi-Tech was issued a warning letter by the Guangdong Securities Regulatory Bureau due to major accounting errors and letter-sharing issues.
It is understood that the main business of Fenghua Hi-Tech is research, production, electronic materials, etc. Financial data shows that in 2017, Fenghua Hi-Tech achieved an operating income of approximately 3.355 billion yuan, corresponding to a net profit of approximately 247 million yuan.
The financial big mistake received a warning letter, and the chairman and financial controller changed.
Prior to this, Fenghua Hi-Tech received the “Decision on the Issuance of Warning Letters to Guangdong Fenghua High-tech Co., Ltd.” issued by the Guangdong Securities Regulatory Bureau on July 25, 2018, and also part of the company’s current and current directors. A total of 6 senior management personnel took the decision to issue a warning letter.
The Guangdong Regulatory Authority pointed out that Feng Huagao, the then chairman of the board, Xing Jianchao, the current president Wang Jinquan, and the then chief financial officer, Liao Yongzhong, should bear the main responsibility for major accounting errors; the current directors Li Zezhong, Xing Jianchao, the current president Wang Jinquan, and the secretary-general Chen Xuyun shall bear the primary responsibility for failing to perform the deliberation process and information disclosure of the board of directors;
The current chairman of the company, Wang Guangjun, the president, Wang Jinquan, and the director of the board of directors, Chen Xuyun, are mainly responsible for the delay in disclosure. The Guangdong Regulatory Authority has issued a warning letter to the above six people. Among the above executives, Liao Yongzhong was dismissed in July 2017. Fortunately, Jian Jianchao resigned in February this year for personal reasons.
Fenghua Hi-Tech recent resistance
According to market news, Fenghua Hi-Tech recently announced that it has significantly adjusted the unit price of the resistors. The 0402J model has a 42.28% increase, and the 0603J model has a 72% increase.
Fenghua Hi-Tech Board Secretary also said that Fenghua Hi-Tech has had multiple price increases since 2018, and the overall price increase has not been counted.
Some investors said that the market was looking at the price increase of Fenghua Hi-Tech, but the day after the news of the price increase, Fenghua Hi-Tech’s share price suffered a flashback, which is obviously unreasonable, which hides many factors.
The government sent a letter requesting an investigation into the impact of component price increases on the industry.
Since the second half of last year, due to the shortage of passive devices due to smartphones, automobiles, AI, mining, 5G, etc., the phenomenon of out-of-stock price increases is serious. The MLCC produced by Fenghua Hi-Tech is one of the “leaders” of out-of-stock prices.
According to the survey of micro-networks, the market demand for mid-range capacitor resistors is not so tight. On the one hand, the original factory is restricting shipments, and on the other hand, the joint agents are smashing goods, causing the price of MLCC to skyrocket, allowing downstream terminal manufacturers. The profit of the product is almost smooth, even at a loss.
On July 26, Shenzhen Longgang District Economic Promotion Bureau issued a letter to the “Question on the Impact of the Fluctuation of Electronic Components Market on the Industry”. From this point of view, the price fluctuations in the electronic components market have been paid attention to by relevant government departments.
Now the government has sent a letter requesting to investigate the price increase of components, and the overall price increase of MLCC has begun to slow down.