Recently, Yan'an Bikang issued an announcement on the external guarantee provided by its subsidiary Runxiang Pharmaceutical, and the cumulative amount of the guarantee is expected to not exceed 23 million yuan, and the guarantee period is not more than 24 months. Up to now, the company has a total of 8 overdue guarantees and 13 overdue debts, with a total amount of 1.191 billion yuan and 2.368 billion yuan respectively, accounting for 13.92% and 27.68% of the company's audited net assets at the end of 2020, respectively. The company's solvency is worth paying attention to.
Previously, Yan'an Bikang issued an announcement on the progress of the investor's litigation matters, and according to the judgment of the Intermediate People's Court of Xi'an City, Shaanxi Province, the defendant Yan'an Bikang had to pay compensation of 25,000 yuan to the investor Wu Yanfen. The company said it would appeal further.
According to the company's 2021 interim report, as of July 27, 2021, the number of the company's securities misrepresentation series cases totaled 501, involving 458 natural person investors, and the amount involved reached 97.8938 million yuan, for which the company has calculated an estimated liability of 18 million yuan.
In October 2020, the Company received an administrative penalty decision issued by the Shanxi Supervision Bureau of the China Securities Regulatory Commission, arguing that the Company had not disclosed the non-operational occupation of funds by the controlling shareholder and its related parties, falsely recorded the relevant annual report and inflated monetary funds, and the information disclosure content of the relevant interim report was inaccurate and incomplete, and there were misleading statements.
From 2015 to 2018, the cumulative inflated monetary funds exceeded 800 million yuan In the past three years, the accounting firm has been changed many times
In April 2021, Yan'an Bikang issued an announcement that, according to the administrative penalty decision it received in October last year, the company calculated that from 2015 to 2018, the controlling shareholders of Yan'an Bikang and their related parties occupied a total of 4.497 billion yuan of non-operational funds. In addition, during the above-mentioned period, the company used false financial bookkeeping, forged bank statements, etc., and accumulated 812 million yuan of inflated monetary funds as of 2018.
It is worth noting that in the past three years, the accounting firm that serves as the auditor of the company has changed frequently. Prior to the Company's receipt of the EAA's administrative penalty decision, from 2018 to 2019, Ruihua And Yongtuo, which acted as the Company's internal control auditor, both issued unqualified internal control reports. It was not until the 2020 reporting period that Yongtuo Certified Public Accountants issued an unqualified opinion with emphasis on the irregular repayment of the 80 million yuan in the process of repayment of non-operating occupied funds by the company's controlling shareholders and their related parties in the process of returning non-operating occupied funds.
Figure 1: The accounting firm that has served and intends to be the auditor of Yan'an Bikang since 2018
After being punished by the CSRC Regulatory Bureau, a number of major shareholders proposed a plan to reduce their holdings
After research, within 6 months after the company received the administrative penalty decision from the EAA on October 15, 2020, shareholders holding more than 5% of the company's shares were not allowed to reduce their holdings in the company. However, since then, the company has repeatedly received plans to reduce its holdings of major shareholders holding more than 5% of the shares.
Figure 2: Yan'an Bikang plans to reduce their shareholdings in the company since it was punished by the Regulatory Bureau
It is worth noting that as of the latest announcement, of the 472 million shares of the company held by the company's controlling shareholder Xinyi Bikang, 470 million shares are pledged, and all the shares are in a state of judicial freezing. Of the 146 million shares of the company held by the actual controller Li Zongsong, 144 million shares are pledged, all the shares are in a state of judicial freezing, and the auction or liquidation of the company's shares held by the above-mentioned shareholders should be suspended.
As of the first half of 2021, it involves a number of major lawsuits The credit rating of the insolvent debt lawsuit was downgraded
According to the first half of 2021, in addition to the previously mentioned series of securities misrepresentation cases, Yan'an Bikang also faced a number of major litigation and arbitration matters that have not yet been concluded. If the above cases require the company to pay the full amount of compensation, the company may face more than 800 million yuan of compensation liability.
Figure 3: Pending major litigation involving Yan'an Bikang as of the first half of 2021
In the series of securities misrepresentation cases, according to the company's latest disclosure of the progress of the litigation, after the first-instance judgment of the Intermediate People's Court of Xi'an City, Shaanxi Province, the defendant Yan'an Bikang must pay compensation of 25,000 yuan to Wu Yanfen, a natural person investor, but the company is not satisfied with the judgment and will appeal.
In addition, for the Yan'an Bikang "18 Bikang 01" bond, as of the first half of 2021, the company has not been able to redeem the principal amount and corresponding interest of the bond as scheduled. According to the reply of Yongtuo accountants to the inquiry letter of the company's 2020 annual report in July 2021, at that time, the company still had 700 million yuan of bonds, and the balance of the company's funds was 569 million yuan, of which 402 million yuan were restricted funds and only 167 million yuan of unrestricted funds, so the bonds could not be repaid on schedule.
Based on the above facts, on January 14, 2021, United Credit Rating Co., Ltd. issued the "Announcement on Downgrading the Long-term Credit Rating of yan'an Bikang Pharmaceutical Co., Ltd. and the credit rating of "18 Bikang 01", which shows that the long-term credit rating and "18 Bikang 01" credit rating of the company's entity were downgraded from BB to C.
The new energy business is vulnerable to market price And the controlling shareholder is facing bankruptcy reorganization
After hours on August 26, 2021, Yan'an Bikang released the third quarter performance forecast, and it is expected to achieve a net profit attributable to the mother of 550 million yuan to 600 million yuan in the first three quarters of 2021, an increase of more than 40 times year-on-year, and a single quarter of the third quarter will achieve a net profit of 246 million yuan to 296 million yuan, a year-on-year turnaround. On the 27th, the company's stock price appeared to rise and fall. Previously, after hours on July 12, the company also issued a semi-annual performance forecast, predicting that the net profit attributable to the mother in the first half of the year would be more than doubled year-on-year, and the stock price on the next trading day would rise and fall.
Yan'an Bikang's current main business includes four major sectors: pharmaceutical industry, pharmaceutical commerce, new energy and new materials and pharmaceutical intermediates. In the first half of 2021, in the case of a slight year-on-year decline in revenue, the net profit attributable to the mother increased by 161% year-on-year to 304 million yuan, mainly due to the significant development of the new energy and new materials business with higher gross profit margin, while the company's traditional main pharmaceutical business was squeezed. Yan'an Bikang, which relies on the development of emerging businesses, may have mixed feelings.
Figure 4: Composition of Yan'an Bikang's main revenue and attributable net profit from 2018H1 to 2021H1
The study found that in the first half of 2021, the company's pharmaceutical industry and pharmaceutical commercial revenue decreased significantly year-on-year, mainly due to the company's production and sales of tablets, capsules, granules and other products. Among the new energy products, the revenue generated by lithium hexafluorophosphate and high-strength and high-modulus polyethylene fiber increased year-on-year, mainly due to the rise in market prices.
Figure 5: Quarterly average prices of lithium hexafluorophosphate and high-strength high-modulus polyethylene fiber related materials from 2019Q1 to 2021Q3
At present, the gross profit margin of the company's new energy business and new materials business is higher, but if the market price of the product declines, the company's profitability may be affected. In the first half of the year, the gross profit margin of the new energy and new materials business was 58.91% and 31.12%, respectively, which were much higher than the gross profit margin of 5.61% of the traditional medicine commercial business.
It is worth noting that in September 2021, Yan'an Bikang received the "Notification Letter on the Progress of the Application for Reorganization" issued by the controlling shareholder, Xinyi Bikang. The reason for the bankruptcy reorganization was that Xinyi Bikang was unable to pay off the debts due to Dingyuan Investment.
This article originated from Bread Finance