Huang Guangyu, "Absence" Gome Will Go
Chairman of the Board
Huang Guangyu
Beijing Public Security Bureau received the news of the investigation, has already been confirmed by the departments concerned, as to the cause being investigated a variety of speculations, most generous with its acquisition of capital market activities.
Stock will be volatile
Present,
States United States
Electric has been appointed Acting Chairman of the Board and Acting CFO, and set up a special committee to assess the impact of the company. However, investors are more concerned with is: if indeed prison Huang Guangyu, Gome going? Can Gome as Wumart (08277.HK), as controlling shareholder of imprisonment in the case of the normal operation of still, the share price is also maintaining stability?
Someone that can. Gome Huang Guangyu has long since quit the day to day management of the country and good business is the cooperation of the seven-member team carried out, Gome Huang Guangyu was not all. However, we believe that, if true felon Huang Guangyu, Gome will face great uncertainty, although the major suppliers to fully support its asset quality is also good, but liquidity and capital restructuring of many possible, to promote its stock price volatility.
Face liquidity pressure
Gome
maximum pressure to bear will come from cash flow. On the one hand, suppliers may reduce the credit account on the state of the United States to increase their demand for working capital, resulting in financial pressure; more importantly, banks may tighten lending to enterprises. It is reported that Gome is in the form of bank acceptance by its vendor payments, in the third quarter of 2008, required mortgage bank deposits equal to the amount of bank acceptance bills 53%, but Huang Guangyu to accept the investigation, the proportion has risen to 60%.
Gome mobility may lead to dry because there is one, is that in May 2010 there will be a 4.6 billion yuan of convertible bonds due. As the conversion price is much higher than its current share price, therefore, the holders of these bonds is likely to repay principal and interest requirements, Gome. The Gome if she could not obtain credit from banks, it may be the outbreak of liquidity.
Hope is
On Gome favorable point is that the main
Home Appliances
Gome brand to continue to operate business support. Domestic appliance sales,
Suning
, The National US duopoly pattern has been formed, much oppression of the appliance brands have bargaining power. If the fallen Gome, Suning will be dominant, it will further blow to home appliances manufacturer's pricing power. Therefore, since the incident Wong Kwong Yu, appliances major brands said they would continue to supply products to GOME, in support of its normal business, Qingdao Haier even in November 22 and as high as 3.2 billion yuan, Gome signed supply contracts.
Sales as the largest home appliance chain Gome's retail network covering the whole country has a market share estimated at 15%, of great value. Therefore, foreign companies should be very happy to buy Gome, Gome also introduce strategic investors to improve the governance structure as part of its action to the business activities of Gome Huang Guangyu of individual behavior and to further isolate.
Our opinion, if the accident Wong Kwong Yu, Gome through a very difficult period, but it will not be bankrupt. After making a painful choice, Gome will be further restructured to improve its governance structure. However, during this time of uncertainty, the stock will be volatile, investors can be carried out only close follow-band operation for profit.
I am an expert from China Crafts Suppliers, usually analyzes all kind of industries situation, such as cosmetic filling machine , plastic coil binder.
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