Anta raises funds to do charity bizarre idea

When Fujian’s richest man, Chen Fashu, was still doing charity for 8.3 billion personal assets, on October 26, Ding Shizhong, a controlling shareholder of Fujian Fuhao and Anta Sports Goods Co., Ltd. (hereafter referred to as Anta), and his family also announced that they were raising charity funds. It plans to allocate 80 million shares and raise 800 million Hong Kong dollars.

The charity fund has now become a fashionable topic for domestic entrepreneurs.

When Fujian’s richest man, Chen Fashu, was still doing charity for 8.3 billion personal assets, on October 26, Ding Shizhong, a controlling shareholder of Fujian Fuhao and Anta Sports Goods Co., Ltd. (hereafter referred to as Anta), and his family also announced that they were raising charity funds. It plans to allocate 80 million shares and raise 800 million Hong Kong dollars.

This became the first time for domestic companies to raise funds through share placement and cash flow for public welfare undertakings. However, due to Chen Fashu’s use of huge amounts of money as a lesson in public welfare, the follow-up of Anta’s major shareholders has also raised public suspicions about his motives.

Part of the share placement gets charity

On October 26, Anta announced that the company’s controlling shareholder and chairman of the board of directors, Ding Shizhong and his family members, intend to issue a price of HK$10 per share, publicly placing 80 million shares of old shares, representing approximately 3.2% of the issued share capital of Anta, and cashing HK$800 million. For this reason, the Ding family has already hired Morgan Stanley as a financial advisor.

For the reasons for cashing, Anta stated in the announcement that the placing is part of the shareholders’ own asset management plan, and part of the proceeds from the placing will be used to set up charitable funds.

This is the first time that domestic companies have used the allotment method to cash out for charity. Before the major shareholders of domestic listed companies cashed out, they mainly sold at high prices in the secondary market.

Moreover, after the actual controller of Xinhua Capital, Chen Fashu, donated 8.3 billion personal assets as a charity fund, another wealthy person in Fujian has high-profile charity. It is understood that at present, charitable donations can enjoy certain tax benefits, and the Ding family’s motivation for donations has also been questioned.

Regarding questions from the outside world, Lu Jiahui, Anta’s vice president of investor relations, said in an interview with reporters on October 27th: “Shareholders’ intentions are relatively simple, and there are no so many ideas that are guessed by outsiders. They mainly contribute to society.”

However, the issue of Chen Fashu’s assets of 8.3 billion in assets had previously been questioned, and the “charitable fund” has also become a sensitive word, and it is feared to avoid it.

Most of the 800 million Hong Kong dollar cash dividends of Ding Shizhong and his family members are used as charitable funds. There is no exact figure at present. Lu Jiahui said that the charitable fund is still in formation. The amount of money that Ding and other shareholders will show hasn't been explained yet. The company has not yet communicated with Ding and other shareholders, and it is not part of the disclosure required by law.

However, this is the second time that Hong Kong-listed companies have made huge cash withdrawals through the placement this year. Prior to this, on September 8th, Ma Yun, Chairman of Alibaba’s Board of Directors, placed 13 million shares and cashed in about HK$273 million to give himself and his family a little staged sense of accomplishment.

However, the low-priced placing market of Ding Shizhong and his family members is not sympathetic. On October 27, on the second day of the announcement of the placement plan, ANTA's share price fell by 0.54 HKD, a decrease of 5.037%. On the 28th, ANTA's share price fell below 10 HKD to close at 9.780, a decrease of 3.550%, which fell below the share price.

Regarding the sharp drop in stock prices, Lu Jiahui said that it is very difficult to speculate whether the stock price falls due to the rights issue, because the Hong Kong stock market is weak on that day, and it may be that some investors are sensitive to the allotment. She stressed: "The company's fundamentals are healthy and we will not worry about the drop in share prices."

Or mergers and acquisitions of American brand AND1

After the allotment was completed, Ding Shizhong still held 0.26% of Anta's shares. The Anta shares held by the controlling Anta International Group fell from 60.15% to 57.48%; Ding Shizhong and his family still held 69.34% of ANTA.

Except for part of the funds used to make charitable funds, the other parts of the 800 million Hong Kong dollar will be used, not mentioned in the ANTA announcement.

Lu Jiahui said that the specific use of shareholders did not indicate whether they were used to invest in acquisitions. The company did not have this responsibility to announce.

However, Lu Jiahui said that in the placement of shares, the company’s shareholder’s views are different from the outside world’s concerns. This time, Ding and other shareholders mainly considered optimizing the structure of shareholders when allocating shares. On the one hand, the company’s tradable shares increased, and the increase in liquidity would attract some large investors. On the other hand, the placing mainly hoped to sell. Some big funds can hold company stocks for a long time.

In fact, after ANTA's listing, it has invested heavily in investment and capital operations in order to quickly gain market share and brand influence in China.

Two months ago, ANTA and the domestic footwear giant Belle International signed an acquisition agreement to acquire the 85% equity interest in Full Prospect held by Belle and the entire share capital of Fila Marketing at a price of approximately 600 million Hong Kong dollars, and to acquire the ownership and operation rights of Fila. And related marketing network. On September 30, ANTA Sports announced that it had completed the acquisition of the aforementioned assets.

At that time, people in the industry believed that Anta had started to attack the first-tier market from the second-tier and third-tier markets through this acquisition, in order to obtain a confrontation with its old rival Li Ning. In fact, Anta has always seen Li Ning as its most important competitor and has attempted to surpass it.

In June of this year, Zheng Jie, Vice President of Anta, revealed in an exclusive interview with this reporter: “Anta ranks No. 1 in terms of product sales volume, and it ranks second behind Li Ning in sales revenue.” Anta is seeking to catch up and surpass. Li Ning.

In the first half of this year, the financial report showed that Anta’s sales revenue was 2.817 billion yuan and net profit was 608.3 million yuan. Li Ning realized sales revenue of 4.052 billion yuan and net profit of 473 million yuan. Anta's net profit has surpassed Li Ning. In the next step, catch-up will focus on sales.

Earlier it was reported that Anta was preparing to acquire domestic sports brand Xidelong, and the American fashion sports brand AND1. It is even more news that Anta has engaged in substantial negotiations with AND1 and is very likely to win. If they win the two, Anta will have the ability to surpass Li Ning. However, this matter has not been confirmed by Anta official. This cash may be prepared for the acquisition.

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