On the evening of January 17, *ST Colin (002499.SZ) once again disclosed the "Indicative Announcement on the Risk of Termination of Listing of the Company's Shares". According to the statistics of Titanium Media APP, this is already the 42nd delisting risk warning announcement issued by the company since 2022.
It is reported that as early as 2021, *ST Colin suffered a delisting crisis due to "three years of negative non-net profit", but in 2021, the company's revenue suddenly increased to 170 million, and the delisting turmoil was alleviated, but the sudden increase in revenue planted a new thunder for the company, and now *ST Colin, which is facing a number of delisting risks, can it "survive" again?
There are many delisting risks
According to the risk warning announcement, *ST Colin may touch the financial category of termination of listing or major illegal forced delisting. According to the announcement, as of now, *ST Colin has not replied to the Shenzhen Stock Exchange's "Inquiry Letter on the 2021 Annual Report of Colin Environmental Protection Equipment Co., Ltd.", the aforementioned delisting risk warning situation has not been eliminated, and the company still has the risk of terminating its listing due to its operating income of less than 100 million yuan after deduction in 2021.
In addition, *ST Colin received the Notice of Case Registration and the Notice of Investigation from the China Securities Regulatory Commission on August 25, 2022; On December 29, the company also received the "Prior Notice of Administrative Punishment and Market Prohibition", according to the circumstances determined in the notice, if the company's operating income in 2021 is less than 100 million yuan after deduction, which may cause the company's stock to touch the situation that "after the implementation of the delisting risk warning, the operating income in the first fiscal year is less than 100 million yuan", there is a risk that the company's stock will be terminated.
On the same day, *ST Colin received the "Decision on Taking Corrective Measures against Colin Environmental Protection Equipment Co., Ltd." from the China Securities Regulatory Commission, requiring the company to implement the correction one by one against the decision to order correction, and complete the rectification before February 1, 2023. The company is verifying the facts and financial data of the suspected violations in the Decision, and according to the facts and financial basis determined in the Decision, it will lead to the deduction of the 2021 annual operating income of less than 100 million yuan, which will lead to the company's stock touching the situation that "after the implementation of the delisting risk warning, the operating income in the first fiscal year is less than 100 million yuan", and the company's stock has the risk of terminating its listing.
It can be seen that the above situations are closely related to the "financial fraud" of *ST Colin's 2021 annual report. According to the notice issued by the China Securities Regulatory Commission, in 2021, Colin Environmental Protection adopted the total amount method to recognize revenue for the new media advertising business, resulting in an inflated operating income of 67.1935 million yuan and an inflated operating cost of 67.1935 million yuan in 2021, accounting for 39.52% and 52.24% of the operating income and operating costs disclosed in the company's 2021 annual report, respectively.
And the reason why *ST Colin "financial fraud" is also one of the fancy shell preservation methods. Titanium Media APP learned that from 2018 to 2020, *ST Colin has deducted negative non-net profit for three consecutive fiscal years, and the 2020 audit report shows that there is uncertainty in the company's ability to continue operating, so the company's stock has been subject to risk warning. According to Article 9.3.11 of the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange (2022 Revision), "after a listed company is subject to delisting risk warning, SZSE decides to terminate the listing and trading of its shares in the first fiscal year: the audited net profit is negative and the operating income is less than 100 million yuan, or the net profit of the latest fiscal year after retrospective restatement is negative and the operating income is less than 100 million yuan."
In order to "cross the line" to avoid delisting, in 2021, *ST Colin's revenue suddenly increased to 170 million yuan, a year-on-year increase of 331.69%, but its net profit attributable to the parent and non-net profit were negative. The surge in revenue also attracted regulatory attention, and after an investigation, *ST Colin's financial fraud was exposed.
Multiple delays in recovery are difficult to alleviate the "crisis"
According to the data, *ST Colin landed on the A-share market in 2010 and is a flue gas purification and treatment solution provider integrating environmental engineering system design, bag dust removal and desulfurization and denitrification product design, manufacturing and sales services in the field of air pollution control. However, after the competition in the original bag dust removal industry intensified, the company's main business development was limited. In order to enhance the company's profitability and sustainable development, in 2017, *ST Colin spun off the original bag dust removal business and laid out the new energy field of photovoltaic power generation.
In 2017, *ST Colin briefly ushered in a highlight moment, its revenue reached 886 million yuan, a year-on-year surge of 171.55%; The net profit attributable to the parent in the current period was 41.61 million yuan. But since then, the company's revenue has begun to decline year by year, and its net profit has fallen into a deep loss quagmire. In 2021, *ST Colin will focus on exploring development opportunities in the field of IT technology development and cross-border e-commerce services, introduce new industrial ecology, integrate resources, and deploy new businesses again, but the actual income can only rely on "financial fraud". Now faced with inquiries from exchanges, the company's strategy is to "remain silent."
Titanium Media APP learned that the Shenzhen Stock Exchange has issued the 2021 annual report inquiry letter, concern letter, 2022 half-year report inquiry letter, and 2022 third quarter inquiry letter to *ST Colin on May 15, August 29, September 8 and November 11, 2022, and repeatedly inquired about the specific transactions of new business and the stability of new business.
However, as of now, *ST Colin has not responded to the above inquiries. Among them, on the evening of January 8, *ST Colin once again announced that since some of the matters involved in the "Annual Report Inquiry Letter" need to be further supplemented and improved, in order to ensure the accuracy and completeness of the response, the company will postpone the completion to January 20. According to statistics, this is already the company's 17 postponed responses, and now, there are only 2 days left before the deadline for replies.
In addition, the titanium media APP noted that *ST Colin has gained 10 dips since January, and its stock price has fallen by 53.5% since December 13, and the company's stock price is only 1.86 yuan, if the company continues the recent downward trend, *ST Colin may also face the risk of "face value delisting" in the future.
In response to the above related questions, the titanium media APP tried to call the *ST Colin contact number several times, but the other party did not reply. Some industry insiders said that although in terms of procedure, *ST Colin can also file statements, defenses and hearing requirements for administrative penalties and market prohibitions, and can also file an application for administrative reconsideration or even file an administrative lawsuit with the court for regulatory measures ordering corrections, the above-mentioned regulatory and punishment measures do not stop being implemented during the reconsideration and litigation. It can be seen that under various crises, there is not much time left for *ST Colin. (This article was first published in Titanium Media APP, author| Yu Ying)