[Text/Financial Kandian.com Xiong Zixuan] On the evening of June 27, CATL issued an announcement: CATL plans to use no more than 23 billion yuan for cash management. It is worth mentioning that Ningde Times made it clear that the purchase of financial products this time used fund

[Text/Financial Kandian.com Xiong Zixuan] On the evening of June 27, CATL issued an announcement: CATL plans to use no more than 23 billion yuan for cash management.

It is worth mentioning that Ningde Times made it clear that the purchase of financial products this time used funds raised through private placement.

Seeing this announcement, investors became uneasy.

It is understood that five days before the above announcement, that is, on June 22, CATL released a private placement results report. The company issued 110 million shares to 22 specific targets at an issue price of 410 yuan/share. The actual net amount raised was 44.87 billion yuan.

As soon as the huge amount of funds raised came in, half of the money was spent on financial management. Netizens ridiculed him for "collecting money while managing finances at the same time." In fact, it is not strange for listed companies to use raised funds, but investors in the CATL era But he was unusually uneasy about it.

Is there any other reason behind the abnormal reaction of stock investors? CATL used more than half of the raised funds to purchase financial management. What’s the logic?

The deep-seated reasons behind the doubts

According to the announcement, the funds used by CATL for cash management this time do not exceed 23 billion yuan. The source of funds is the fixed increase of nearly 45 billion yuan that was just launched a few days ago, which means , more than half of the previous fixed increase amount was used to purchase financial management.

The reaction of stock investors to this was: "While making money, manage finances at the same time", "So why do we need to issue additional shares? Are we short of money?". Obviously, investors generally believe that CATL is suspected of cutting leeks.

There are actually deep-seated reasons why the criticism is so loud.

First, the fixed increase plan was modified due to inquiries.

In August last year, CATL launched a 58.2 billion fixed increase plan and stated that 5.5 billion of the funds would be used for financial management. The plan was issued a review inquiry letter by the Shenzhen Stock Exchange, asking whether there was excessive financing. Until November 2021, CATL adjusted its fixed-increase plan and planned to lower the total planned raised funds from no more than 58.2 billion yuan to no more than 45 billion yuan. And received approval from the China Securities Regulatory Commission in April 2022.

Second, the recent stock price fluctuations of CATL have been huge.

CATL’s first quarter 2022 financial report shows that although total operating revenue increased by 153.97% year-on-year, other data have declined sharply. Net profit attributable to shareholders of listed companies fell by 23.62% year-on-year, and net profit fell by 41.57%. , the main reason is the rise in raw material prices, and the increasingly fierce competition among peers is also a problem that cannot be ignored.

Data from the China Automotive Power Battery Industry Innovation Alliance show that in the first five months of this year, CATL’s market share of power battery installations fell to 47.05%, a drop of more than 5 percentage points compared to last year’s market share (52.1%).

The market share of BYD , which ranked second, increased to 22.58% in the first five months of this year, an increase of 6.38 percentage points compared to last year's market share (16.2%). In April this year, BYD even surpassed CATL in terms of market share of lithium iron phosphate battery with its " blade battery ".

Obviously, the status of "Ning Wang" is in jeopardy, and its stock price once fell to the lowest of 353 yuan per share.

The announcement of the approval of the company's private placement application on April 29 and the launch of Kirin Battery on June 23 caused the company's stock price to rise to 564.97 yuan per share. The huge increase attracted the attention of many investors and stirred everyone's nerves. , so the announcement of purchasing financial management on June 27 was so eye-catching.

So, is CATL’s operation reasonable?

Corporate finance It’s not surprising

According to the announcement, CATL’s capital investment is divided into five major purposes, including lithium-ion battery production base projects and new energy advanced technology research and development and application projects, etc. Obviously, cash management did not appear in the company's fixed increase plan, and this may be the reason why Ning Wang's huge financial management is quite controversial.

The author asked relevant people about this issue, and a well-known securities analyst said: " cash flow is good, it is normal to buy financial management, it is better than leaving it in the bank, the money is spent slowly."

As he said , there are many listed companies that are keen on using idle funds or own funds for cash management. This is usually regarded as a win-win option to improve the efficiency of fund use, obtain additional income, and enhance mutual trust and cooperation with banks or financial institutions.

On the 27th, nearly 30 listed companies, including CATL, issued relevant announcements about using idle raised funds for cash management, such as: Sealing Technology (284 million yuan), Depan Nano (3.2 billion yuan) , Allianz Ruishi (900 million yuan), Shenhao Technology (250 million yuan), Infineon (800 million yuan), etc.

There are also companies with large amounts of funds. For example, liquor giant Shanxi Fenjiu announced after the market closed on May 17 that it planned to use its idle self-owned funds of no more than 20 billion yuan to purchase structured deposits. On April 29, Jiu'an Medical announced that the company's board of directors agreed that the company should use no more than 9.5 billion yuan or its equivalent in foreign currency idle self-owned funds for financial products.

Generally speaking, the popularity of listed companies using idle funds to purchase financial products remains unabated this year. Data show that as of June 27, the number of listed companies subscribing/holding financial products this year has reached 903, compared with 1,306 for the whole of last year. Judging from the scale of subscriptions, Jiangsu Cathay Pacific (17.788 billion yuan) and China Telecom (10.170 billion yuan) have total subscription funds of more than 10 billion. There are 6 companies with subscription amounts of more than 5 billion yuan, including CITIC Securities (9 billion yuan), Weichai Power (7.298 billion yuan), Dia shares (6.394 billion yuan), Aviation Power ( 6.000 billion), etc.

These financial products are generally investment products issued by financial institutions such as banks and securities firms with high security, low risk and good liquidity.

Judging from the scale of funds, Ningde era is the best, which is one of the reasons why the announcement has been hotly discussed.

"Just because CATL is on the cusp of the storm and people have money but don't use it immediately, everyone reacts very strongly, but in fact this is normal." An private equity fund analyst expressed his opinion.

He also added: "It is normal for companies to use the funds raised for financial management, and there is no limit on the ratio of the amount of funds invested to the total amount raised. The purpose of CATL's fundraising this time is to expand production capacity, and it cannot be expanded at once Yes, there must be a process. If the holding period of the financial management is 2 to 3 years, there may be problems, but if the holding period of this financial management does not exceed 12 months, there is no problem."