For suspected violations of the law and regulations, the CSRC filed a case against Blue Shield shares

Per reporter: Wang Jing Per editor: Wen Duo

Blue Shield (300297, SZ), which describes itself as a "leader in smart security," is in an increasingly difficult situation.

On December 29, Blue Shield issued an announcement that the China Securities Regulatory Commission decided to file a case against the company due to suspected violations of laws and regulations on information disclosure. Blue Shield said that the above matters will not have an impact on the company's normal operating activities. The Company will actively cooperate with the CSRC's investigation work and continue to pay attention to the progress of the above matters and fulfill its information disclosure obligations.

According to public information, Blue Shield co., Ltd. was established in 1999, and has been focusing on the field of network information security since its establishment, building a business ecology based on security products, covering security solutions, security services and security operations.

In fact, before the CSRC filed an investigation into Blue Shield shares, Blue Shield shares have received attention from regulatory authorities many times. At the same time, the company has also been mired in losses in recent years.

Blue Shield shares have long been plagued by negative news. Retrospectively announced, on November 30, 2021, due to the violation of the change in the equity of the controlling shareholder, Blue Shield shares received a regulatory letter from the Shenzhen Stock Exchange. On September 24, Blue Shield and its controlling shareholder, Ke Zongqing, received a warning letter from the Sichuan Regulatory Bureau of the China Securities Regulatory Commission (CSRC) due to the company's disclosure of the 2020 Annual Results Forecast on January 29, which expected the net profit attributable to shareholders of the listed company in 2020 to be 20 million yuan to 30 million yuan, but revised to a loss of 1.05 billion yuan to 1.1 billion yuan on April 30. Due to the change in the nature of profit and loss, the amount of significant differences and the failure to amend in a timely manner, on October 21, the Shenzhen Stock Exchange decided to publicly condemn Blue Shield shares and its related parties.

At the same time, affected by factors such as insufficient liquidity, Blue Shield shares have also successively experienced overdue debts, litigation involved, and some subsidiaries have been listed as dishonest executors.

On July 30, Blue Shield announced that the company received a relevant "notice" issued by the Guangzhou Intermediate Court. It is mentioned that the applicants, Cai Bin and Li Anping, respectively, applied to the Guangzhou Intermediate Court for bankruptcy liquidation of the company on the grounds that the respondent Blue Shield shares could not pay off their debts as they fell due.

According to the announcement, Blue Shield shares should repay the principal and interest of the claims to the applicant Cai Bin and Li Anping before December 31, 2020, which are 71.3676 million yuan and 23.2318 million yuan respectively, but because the company failed to repay the money as agreed, the applicant applied to the Yuancheng Court for compulsory enforcement, and the enforcement has not been completed so far, so the applicant applied to the Guangzhou Intermediate Court for bankruptcy liquidation of the company.

On September 22, Blue Shield shares disclosed the progress of the bankruptcy liquidation application, saying that in view of the fact that the company's registered address has been changed to "No. 15, Building 72, Jinrun Industrial Park, Gaochang Town, Xuzhou District, Yibin City, Sichuan Province", the registration authority is the Yibin Municipal Market Supervision and Administration Bureau, and the Guangzhou Intermediate People's Court believes that it does not have jurisdiction according to the relevant laws and regulations, and hereby rejects cai bin and Li Anping's application.

In addition to frequent regulatory attention, in recent years, Blue Shield shares have also fallen into a quagmire of losses.

In 2019, Blue Shield achieved operating income of 1.919 billion yuan, down 15.89% year-on-year; net profit attributable to shareholders of listed companies -937 million yuan, the first loss after listing; in 2020, the company's operating income was about 1.046 billion yuan, down 45.53% year-on-year, and the net profit loss attributable to shareholders of listed companies was about 1.093 billion yuan. Behind the loss is mainly caused by the debt risk caused by insufficient liquidity, the decline in the performance caused by the restriction of the development of the e-commerce business of the subsidiary, and the company's provision for bad debts of accounts receivable and impairment of goodwill.

Entering 2021, the debt crisis of Blue Shield shares has not yet been lifted. According to the third quarter report released by the company, in the first three quarters of 2021, Blue Shield achieved revenue of 278 million yuan, down 61.26% year-on-year, and the net profit attributable to the mother was 944 million yuan, down 851.33% year-on-year.

In this regard, some investors are worried about whether the company will be delisted. However, in October this year, Blue Shield responded on the investor interaction platform that at present, the company has not touched the relevant delisting indicators, and the company's stock trading has not been delisted risk warning. Subsequently, the company will focus on the annual business plan, focus on the main business of network information security, grasp the policy dividend, actively participate in the construction of the national network security system, rely on the company's products, research and development, qualifications, one-stop security solution capabilities, successful cases in major industries and other core advantages in the field of network information security, strengthen business expansion, and strive to improve business performance.

In addition, the reporter also noted that in the 2021 semi-annual report, when talking about the outlook of Blue Shield shares on the development of the industry in the next year, the company said that it will reach an agreement with relevant creditors on debt solutions as soon as possible, including but not limited to extensions, partial repayments, etc.; at the same time, the company will raise funds to resolve the company's debt risks by accelerating the recovery of accounts receivable, disposing of assets, supply chain finance, and continuing to deepen cooperation with local governments, so as to return the company to the normal development track as soon as possible.

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