Fengnian Capital removes chairman of a listed company, and Dalicepp follows up with “internal strife”

Photo source: Visual China

Blue Whale News, February 18 (Reporter Wang Jianwen)On February 17, the latest announcement from the listed company Dalicap showed that the company’s board of directors passed a proposal to remove Chairman Liu Xibi from his post as a director and by-elect Zhao Feng as a non-independent director. According to a previous report by Blue Whale News on February 12, after the construction started in the New Year this year, Zhao Feng, the actual controller and founder of Fengnian Capital, has been stationed at the headquarters of Dalicepu in Dalian and is planning to remove Chairman Liu Xibi.

Liu Xibi is 40 years old. He graduated from Dalian Foreign Studies University with a bachelor’s degree and later worked in an accounting firm. In 2015, he joined Fengnian Capital as an investment manager. Since 2017, he has served as the chairman of Dalicepu for a long time and is specifically responsible for the company’s operations. He is now a representative of Liaoning Province and Dalian City People’s Congress and vice chairman of Liaoning Provincial Federation of Industry and Commerce. He has won the honors of Liaoning Province ‘s Top Ten Merits in Scientific and Technological Innovation and Dalian City’s Leading Talent in Innovation and Entrepreneurship in Support of High-Level Talent Program.

The announcement shows that the eighth meeting of the second board of directors of Dalicap was held in the company’s conference room on February 16. The notice of the meeting was sent to all directors by email on February 11. The meeting should be attended by 9 directors, and 9 people actually attended. The meeting was convened and supported by Chairman Liu Xibi.

The announcement disclosed that Fengnian Zhixin, the controlling shareholder of Dalicepu, requested to remove Liu Xibi from his directorship due to subsequent strategic planning considerations, and requested Zhao Feng, the company’s actual controller and partner of Fengnian Capital, to be elected as a non-independent director of the second board of directors. Regarding the relevant proposal, the board of directors voted in favor of it after voting, Chairman Liu Xibi voted against it, and independent director Wen Xueli abstained.

The above proposals will also go through the process and be submitted to the shareholders ‘meeting for review. This time, the board of directors approved the proposal to convene the company’s first interim shareholder meeting in 2025, which is scheduled for March 5. If nothing goes wrong, Zhao Feng is expected to take over as chairman of Dalicepp.

According to public information, Dalicap’s board of directors has a total of 6 non-independent directors and 3 independent directors, of which 4 non-independent directors were nominated by Fengnian Zhixin, including Liu Xibi. The term of office of the current board of directors ends until July 2026.

Why did Fengnian Capital remove its long-appointed chairman? What conflicts occurred between the two parties? Blue Whale News will continue to follow.

Controlling shareholder removes his own person”

Dalicap has just been listed for more than a year and successfully landed on the GEM in December 2023. It is known as the first stock of radio frequency microwave capacitors on the market. The company is headquartered in Dalian City, Liaoning Province, and its main products are radio frequency microwave ceramic capacitors (MLCC). Data for 2023 shows that as a leader in the field of radio frequency microwave MLCC, Dalicap ranks 6th among global companies and 1st among China companies in market share in the field of radio frequency microwave MLCC. It is a local star high-tech enterprise in Dalian.

At present, the controlling shareholder of Dali Capp is Ningbo Meishan Bonded Port Area Fengnian Zhixin Investment Management Co., Ltd.(referred to as Fengnian Zhixin), with a shareholding ratio of 40.17%. The actual controller is Zhao Feng. The second largest shareholder of the listed company is Panxin Investment, a subsidiary of CITIC Industrial Fund. Wu Jiwei, the company’s chief engineer, and Liu Xibi, the company’s chairman and general manager, are the third and fifth largest shareholders of the company, with shareholding ratios of 4.37% and 3.59% respectively.

Fengnian Capital, behind Fengnian Zhixin, is a relatively active primary market investment institution in recent years, with key investment areas including military industry and high-end manufacturing. Founder Zhao Feng was born in 1984 and once worked in Jiuding Investment. In 2014, Zhao Feng, who left Jiuding Investment, and several partners co-founded Fengnian Capital. Dalicepu is a star project invested by Fengnian Capital in the form of holding and successfully listed. Fengnian Capital investment projects have also been listed by Dameng Data, Western Testing, Boya Seiko and other companies.

Liu Xibi also came from Fengnian Capital. The company once stated in a reply letter to the listing inquiry that Liu Xibi successfully explored the Dalicap acquisition project and was responsible for the entire process of communication and promotion of a series of matters such as project establishment, due diligence and acquisition. After Fengnian Capital gained control of Dalicap, Liu Xibi came to Dalian to serve as chairman of Dalicap, and later served as general manager of the company to this day.

The latest board meeting announcement shows that Fengnian Zhixin’s reason for removing Liu Xibi was strategic planning considerations. However, Liu Xibi did not agree with this and voted against the relevant proposal in the board vote.

Liu Xibi believed in his objection that in 2016, the company’s revenue was approximately more than 80 million yuan. During my duties, through years of joint efforts with all employees of the company, from 2017 to 2023, the company’s revenue increased from about 100 million yuan to 345 million yuan; net profit increased from more than 40 million yuan to 124.83 million yuan; Total assets increased from about 150 million yuan to 1.494 billion yuan… All financial indicators are at the industry-leading level.& rdquo; The company successfully completed its listing on the GEM, achieving a leap forward in the capital market and bringing rich investment returns to all shareholders.” rdquo; The company has developed from a small and medium-sized manufacturing enterprise to an important domestically produced supporting enterprise for the autonomy of my country’s high-end equipment and electronic information industry.& rdquo;

“As a shareholder, chairman and industry expert of the company, he is full of confidence in the company’s established strategic plan and deeply confused about the strategic planning considerations put forward by Fengnian Zhixin. Although Fengnian Zhixin is the company’s largest shareholder, Mr. Zhao Feng indirectly controls the voting rights of 40.17% of the company’s shares through Fengnian Zhixin and is the actual controller of the company. However, Zhao Feng was mainly engaged in financial investment and financing related business, and has relatively limited understanding of the company’s high-end electronic components industry, the strategic direction of technology research and development, market competition, industrial pattern, policy guidance, and international situation. rdquo;

Therefore, Liu Xibi raised the question: During my term of office, without any justifiable and clear reasons, the sudden removal of the company during the critical period before the annual review of the financial report was in line with the company’s development needs and whether it was in line with the company and the interests of shareholders, especially minority shareholders, and all employees of the company.

In addition, independent director Wen Xueli also abstained from voting on relevant proposals. Wen Xueli pointed out in his reasons for abstention that since the company has only been listed for more than a year, taking into account the company’s social image, if there are no major problems, it would be best for the personnel adjustment of the board of directors to be replaced by the current board of directors. rdquo;

Fengnian Capital was involved in illegal reduction of holdings

Dalicepu was originally a small and medium-sized manufacturing enterprise controlled by Dongbao Electric, a subsidiary of the State-owned Assets Supervision and Administration Commission of Dandong City. In 2017, Fengnian Yongtai acquired the 40% and 35% equity of Dalicap held by seven shareholders including Dongbao Electric for 300 million yuan. At the same time, Fengnian Yongtai subscribed for Dalicap for 17 million yuan. The registered capital of 450,450 yuan. After the above equity changes, Fengnian Yongtai spent a total of 317 million yuan to obtain control of Dalicepu.

Listing materials show that when investing in Dalicap, Fengnian Capital invested 49.8 million yuan through its subsidiary Fengnian Yongtai, and Orient Assets invested 33.2 million yuan through its subsidiary Dongfang Qianhai (Hangzhou). In addition, Orient Assets also provided a loan of 237 million yuan to Fengnian Capital to complete the equity acquisition. It is worth mentioning that of the 49.8 million yuan invested by Fengnian Yongtai, 32.85 million yuan came from loans from Wu Yaojun, the actual controller of Zhongqi Shares (3000575). Fengnian Yongtai’s actual own capital was only 16.95 million yuan, accounting for only a fraction of the purchase amount of more than 300 million yuan.

In 2020, Fengnian Yongtai transferred 17.74% equity of Dalicepu to Panxin Investment, a subsidiary of CITIC Industrial Fund, for a consideration of 315 million yuan, and then used the above funds to pay off the debts of Orient Assets. In 2021, Yongtai repaid Wu Yaojun’s loan again.

At present, Dongfang Assets and Wu Yaojun can still be seen in Fengnian Zhixin’s equity structure. After the penetration of shareholders, Fengnian Zhixin’s shareholders are mainly Fengnian Capital and Dongfang Fuxing, which has the background of Dongfang Assets. Fengnian Yongtai, a subsidiary of Fengnian Capital, holds 50.5331% equity of Fengnian Zhixin. Dongfang Fuxing and its wholly-owned subsidiary Dongfang Qianhai Investment holds a total of 42.228% equity of Fengnian Zhixin, and natural person Wu Yaojun holds 7.2389% equity of Fengnian Zhixin.

Dali Capp’s controlling shareholder Fengnian Zhixin and the second shareholderPanxin Investment belongs to financial investment capital. After the storm of removing the board of directors, the outside world is concerned about whether it will affect the stability of Dalicap’s operations and control in the future.

It is worth noting that Fengnian Capital had previously been involved in illegal reduction of holdings. In July 2023, Fengnian Capital’s shareholding company lifted the ban on the restricted shares of the Western Testing Test. In the same month, Fengnian Capital announced that it would reduce its shares. Since then, Fengnian Capital has reduced its holdings of the company’s shares by 1.08% within one month, violating the new rules on reduction that were just introduced at the time. Affected by this, the regulated party of Fengnian Capital took regulatory measures to order corrections.

In addition, the second shareholdersPanxin Investment has begun to reduce its holdings. After the first anniversary of Dalicap’s listing, on January 9, 2024, Panxin Investment Officer, the second largest shareholder of Dalicap, announced a reduction in holdings. As of February 10, Panxin Investment’s shareholding ratio had been reduced from 17.14% before the reduction, and the reduction ratio reached 0.40%.

On February 17, Dalicap’s share price closed at 15.96 yuan/share, with a total market value of approximately 6.4 billion yuan.