In June, the total number of delisted companies in Shanghai and Shenzhen exceeded 20, a record high. Among them, Lion Retirement (002684), Kedi Retirement (002770), and King Kong Retirement (300064) are all listed companies of Henan.
Another Henan-listed company, ST Furen (600781), was filed by the China Securities Regulatory Commission for failing to disclose the audited 2021 annual report and 2022 first quarterly report within the statutory period. Although the company completed the financial report disclosure within the two-month deadline, the company was still issued a delisting risk warning.
Late earnings report reproduces large losses
Nearly two months after the suspension of trading, ST Furen, who was standing on the brink of delisting, finally disclosed the late 2021 annual report and 2022 first quarterly report, and the company’s shares will also resume trading on July 1.
Because the audit institution Shenzhen Xutai issued an audit opinion that could not express an opinion on the company’s 2021 financial report, and issued a negative opinion on the effectiveness of the company’s internal control, ST Furen will be issued a delisting risk warning after the resumption of trading, and the company’s stock abbreviation will be changed. For “*ST Fu Jen”, the daily limit on the share price is still 5%.
After breaking an appointment for dividends, being filed by the China Securities Regulatory Commission, and the stock price falling, ST Furen’s business conditions have also deteriorated.
The 2021 financial report shows that, affected by financial difficulties, ST Furen achieved operating income of 1.512 billion yuan during the period, a decrease of 47.67% from the previous year; a loss of 3.2 billion yuan, an increase of 147.5% from the loss of the previous year; basic earnings per share loss of 5.18 yuan, Earnings per share loss increased by 151.46% over the previous year.
In the first quarter of 2022, the company’s losses further expanded. During the period, its operating income was 349 million yuan, a year-on-year decrease of 29.3%; its loss was 177 million yuan, a year-on-year decrease of 360.83%.
The huge loss in performance in 2021 is not unrelated to ST Furen’s provision for large asset impairment.
According to the disclosure, in 2021, the company made various asset impairment provisions totaling 1.928 billion yuan, accounting for 60.28% of the company’s latest audited net profit. Among them, the company’s accounts receivable accrued credit impairment reserves of 620 million yuan, and other receivables accrued credit impairment reserves of 1.309 billion yuan.
Since September 3, 2019, ST Furen has been issued other risk warnings due to the non-operational use of funds by the controlling shareholder and its related parties, and the provision of external guarantees in violation of the prescribed decision-making procedures.
As of December 31, 2021, as of December 31, 2021, the company’s controlling shareholder Furen Pharmaceutical Group Co., Ltd. and its related parties occupied a net capital of 743 million yuan (the balance of capital occupation was 1.653 billion yuan, and a bad debt provision of 910 million yuan had been made) ); the company provided illegal guarantees to the controlling shareholders and related parties, and the remaining guarantee balance was 1.74 billion yuan (of which 150 million yuan was not liable for the guarantee in the first instance judgment), and 433 million yuan of estimated liabilities had been accrued.
Sustainability still in doubt
On June 22, Cody announced the termination of listing and delisting, and the company’s stock has been delisted since June 23. After less than a week,
On June 26, King Kong Retirement and Lions Retirement were also announced successively, and the company’s stock will be delisted on June 27, 2022.
Although it released its financial report at the end of June and avoided the “delisting tide”, ST Furen, whose financial report has been issued a non-standard review machine opinion for three consecutive years, still faces the test of its ability to continue operating.
The audit institution Shenzhen Xutai believes that ST Furen has many problems such as illegal occupation of funds and illegal external guarantees by the controlling shareholder and its related parties. As of December 31, 2021, the net amount of funds occupied by the company’s controlling shareholders and related parties reached 743 million yuan, and the balance of illegal guarantees was 1.74 billion yuan.
At the same time, as of December 31, 2021, ST Furen had difficulty in liquidity, facing the pressure of overdue debt repayment and joint compensation for external guarantees. At the same time, it involved multiple lawsuits, some bank accounts and assets were frozen, and it was able to continue operating. There are significant uncertainties.
In addition, although Shenzhen Xutai has carried out necessary audit procedures such as interviews, confirmations, and inspections on ST Furen’s sales and accounts receivable in 2021, due to the defects in the operation of internal control of monetary funds, there is no amount of customer receivables in 2021. The total account balance is 564 million yuan (171 million yuan has been withdrawn for bad debts), and it is impossible to judge the appropriateness and recoverability of the book balance of accounts receivable and the possible impact on the financial statements.
In the internal control audit report, Shenzhen Xutai believes that the internal control operation of ST Furen’s capital management, seal management, related party transactions and external guarantees, sales management, information disclosure and other aspects has failed, and the internal control operation of financial reporting related to the above matters. invalid.
According to reports, 6 companies under ST Furen transferred the company’s asset package with a book value of 999 million yuan to Tibet Huayu Asset Management Co., Ltd. at a price of 571 million yuan. On June 22, 2022, both parties to the agreement decided to terminate the implementation, and ST Furen adjusted the statement. The audit institution cannot obtain sufficient and appropriate audit evidence to judge the rationality of its business logic and its impact on the financial statements.