Liandai Technology Has Risen 20 Times Since Its Listing On The Stock Market?

China General shares in the U.S.A.

On April 7, utme. NASDAQ landed in the U.S. stock market at a price of $4. After the on-the-spot bidding, Liandai technology jumped 285% to $11.4 in the opening session. Since then, its share price has continued to rise. It has repeatedly broken down in the session, and its share price once climbed to $46, up 1150%. It closed at $39, up 875%.

After the first trading day, the rise of Liandai technology continued on April 8. The next day, it opened with a 54% increase. The intraday trading showed a volatile trend and triggered the circuit breaker again, with an increase of 170.95%. By the end of the day, Liandai technology reported an increase of 110.69% at $82.17.

From the stock itself, Liandai technology is a typical small cap stock. According to the IPO information, Liandai Technology issued 3.75 million common shares to the public at a price of 4 US dollars, with a fund-raising scale of US $15 million and an IPO market value of about US $33 million. After the first day's soaring, the total market value of Liandai technology was 322 million US dollars, and the circulation market value was 146 million US dollars.

"Liandai technology is a very small and concentrated stock. In the short term, without obvious fundamental support, the company has been hyped up 20 times, and the daily turnover rate is as high as 188%," tiger securities investment research team told the 21st century economic report reporter, "we think this kind of stock is very risky, and we should remind investors to participate carefully."

As of 8:00 p.m. on April 8, Liandai technology was down 17.24%.

Mobile phone factory making a profit by selling masks

Liandai technology is a mobile phone manufacturer.

According to the prospectus, Liandai technology was founded in 2008, mainly engaged in the design, development, production, sales and brand operation of mobile phones, accessories and related consumer electronic products, and provides electronic manufacturing services (EMS), including OEM and ODM services, with customers including TCL, Haier, etc.

In the two fiscal years ending March 31, 2019, March 31, 2020, and six months ending September 30, 2020, the revenue of OEM / ODM business accounted for 85.7%, 90.7% and 72.0% of the company's total revenue, which can be regarded as the core business of Liandai technology.

In addition to OEM, it also has two independent brands: do focusing on the low end and utime focusing on the middle and high end. Most of its products are sold all over the world, including emerging markets such as India and Brazil, as well as mature markets in Europe and America.

In the two fiscal years ending March 31, 2019, March 31, 2020, and six months ending September 30, 2020, the revenue share of this business was 14.3%, 10.9% and 2.6%, respectively. It can be said that the sales capacity of Liandai technology's self owned brand is continuing to shrink.

In a word, Liandai's products are cheaper, targeting low-income users.

Similar to the position of Liandai technology, it also focuses on the medium and low-end voice holding. However, unlike voice holding's "making money to be soft", it won't turn losses into profits until 2020.

According to the prospectus, during the six months ended September 30, 2020, Liandai technology had net sales of $26.237 million and net income of $1.022 million. In the financial year ended March 31, 2020, the net sales volume of Liandai technology was $27.253 million, but it recorded a net loss of $3.062 million.

The reason why we can turn losses into profits in 2020 is largely due to the agency sales of masks of Liandai technology. According to its introduction, since March 2020, Liandai technology has temporarily distributed masks to existing overseas customers in Brazil.

In the six months up to September 30, 2020, the sales of masks on a commission basis accounted for 25.4% of the total revenue of liangen technology, with an estimated gross profit margin of 19%. By comparison, the gross profit margin of the main mobile business equipment of Liandai technology is about 11%. It has to be said that the income from the sales of masks is easier for Liandai technology, but it has made it clear in the prospectus that it is not prepared to take the sales of masks as the company's long-term business strategy.

Cash flow has always been a problem for Liandai technology, which is also the driving force and reason for its sprint to US stocks. According to the prospectus, during the financial year ended March 31, 2020, the cash and cash equivalents of Liandai technology were only US $554000, and in the six months ended September 30, 2020, its cash and cash equivalents were only $113000.

Generally speaking, from the financial data, Liandai technology is an enterprise still struggling to survive online. Whether it is the core profitability of its main business, or the company's operating indicators such as cash flow, there are risks.

Watch out for "killing pigs"

It is such an obscure technology with a market value of only 30 million US dollars, which has caused a great stir in the US stock market for two consecutive days.

After soaring on the first day of listing on April 6, Liandai technology has attracted a lot of attention. According to the data, Liandai's stock price was as high as $46 as low as $11.4, up more than 1100% compared with the issue price of $4, and the turnover rate was 47.38%.

"The market value of Liandai technology is too small. It feels like" killing pigs. " On the evening of April 7, before the US stock market, a person who paid attention to the joint generation technology commented to the reporter of the 21st century economic report.

At that time, Liandai technology had risen by more than 20%. After the opening, Liandai technology went up rapidly, with a rise of 170% within an hour. After that, it continued to fluctuate and rose 110.69% to the end of the day.

"I feel that I have been doing all kinds of small cap stocks recently." Some practitioners told the 21st century economic reporter, "those who have the ability can pay attention to this kind of innovation recently, but it is better not to enter the market after listing, let alone hold it for a long time, otherwise it may be locked up for a long time."

Tiger securities investment research team also stressed to the 21st century economic reporter that "quasi Zhuang stocks" with concentrated chips such as Liandai technology have great risks, and investors are better to participate cautiously.

"We've seen countless stocks without fundamental support suffer from short-term speculation, and eventually return to value." Tiger securities investment research team pointed out, "we do not want investors to participate in such high-risk opportunities. We believe that investors should stick to investing in long-term high-quality opportunities where growth and valuation coexist."