On May 10, the Shenzhen Stock Exchange sent a letter of inquiry regarding the 2021 annual report to CITIC Guoan Information Industry Co., Ltd.
In the inquiry letter, it is mentioned that CITIC Guoan will achieve operating income of 2.66 billion yuan in 2021, net profit of -1.476 billion yuan, net profit after deduction of non-deductibles -1.191 billion yuan, and net cash flow from operating activities -74.0458 million yuan. As of December 31, 2021, its current liabilities were higher than current assets, and some of its debts were overdue. And CITIC Guoan has had a negative net profit after deduction for four consecutive years. The Shenzhen Stock Exchange stated that CITIC Guoan’s 2021 financial report was issued with an unqualified audit report with a paragraph of significant uncertainty about going concern.
The Shenzhen Stock Exchange’s inquiry letter raised 12 major issues to CITIC Guoan, including business operations, industry conditions, types of debts due, debt amounts, etc.
It is worth noting that the lower of the net profit before and after deducting non-recurring gains and losses for three consecutive years is negative, and the audit report of the last year shows that there is still uncertainty in the ability of CITIC Guoan to continue operating. Recently, CITIC Guoan has been implemented. For other risk warnings (ST), the stock names of relevant platforms have been temporarily changed to “ST Guoan”.
At present, in terms of cable TV network business, CITIC Guoan has invested in cable TV projects covering 13 cities in seven provinces including Hubei, Hunan, Jiangsu, Anhui, Shandong, Hebei and Henan. The cable TV network serves a population of nearly 300 million. All of them set up joint ventures with local radio and television parties in the form of shareholding to jointly operate and manage the invested cable TV projects.