Editor's note:
According to the Regulations on the Supervision and Administration of Securities Companies (Draft Revisions) issued by the China Securities Regulatory Commission (CSRC), securities companies engaged in securities proprietary business shall not engage in or assist others in engaging in unfair trading, benefit transfer, or evading regulatory requirements or statutory obligations; Securities companies shall establish an abnormal transaction monitoring system to effectively manage their own and their customers' trading behaviors and prevent abnormal trading behaviors.
Based on the position and credit disclosure data, Bread Finance will review the compliance of the internal control construction of major securities companies in batches. This case is Shenwan Hongyuan Securities.
In the case that the relevant listed company has been publicly reprimanded by the exchange for serious violations, issued a "warning letter" by the regulatory authorities, and the exchange has publicly notified that its letter disclosure is "unqualified", Shenwan Hongyuan Securities still has a heavy position in related companies, and even entered the list of the top ten outstanding shares. Is it compliant? Is there another reason?
Bread Finance Research found that in the third quarter of 2023, Shenwan Hongyuan Securities entered the list of the top ten circulating shareholders of two listed companies, Pan Micro Network and Weiming Pharmaceutical, becoming the fourth and third largest circulating shareholders of the two companies respectively.
However, the two listed companies have major loopholes in compliance, and the exchange has rated the disclosure work of the two companies as "unqualified" for two consecutive years.
In recent years, Panwei Network has had many violations and has been subject to regulatory penalties. In recent years, unnamed pharmaceuticals have also had serious compliance problems, and have been investigated by regulatory authorities for unqualified information disclosure and other reasons in recent years, and have received a warning letter from the regulator.
Shenwan Hongyuan Securities' new positions are subject to regulatory warnings, unqualified disclosures, and continuous decline in performance, are the company's investment and research risk control and operation compliant? Is the Inspector General diligent and conscientious? How should Liu Jian, chairman and acting general manager, make up for the shortcomings of compliance in the future?
The letter disclosure assessment has been "D" for two consecutive years
According to the "Evaluation Guidelines" disclosed by the relevant information of the exchange, the evaluation benchmark of listed companies is 80 points, and points will be added or subtracted on the basis of the benchmark score with reference to the corresponding evaluation standards. The final evaluation results are divided into four grades from high to low: A (excellent), B (good), C (pass), and D (unqualified).
According to the recently disclosed information disclosure evaluation results of listed companies in Shanghai and Shenzhen, the evaluation grade of Pan Micro Network and Unnamed Pharmaceutical has been D for two consecutive years, that is, the company's information disclosure work is unqualified.
According to public information, Pan Micro Network has attracted the attention of the exchange and the regulatory bureau many times in recent years due to violations of information disclosure and other matters.
In November 2022, Pan Micro Network, Wei Lidong, then chairman and general manager and actual controller, and relevant responsible persons received the "Disciplinary Decision Letter" issued by the Shanghai Stock Exchange. A day later, Panwei Network announced that it had received the "Decision on Administrative Supervision Measures" from the Shanghai Regulatory Bureau of the China Securities Regulatory Commission.
After investigation, the company failed to review and disclose the related parties of the capital increase in accordance with the regulations; Failure to review and disclose the sale of real estate to related parties in accordance with regulations; Failure to disclose the provision of loans to related parties as required; Failure to timely disclose a number of irregularities such as provision for impairment of large assets.
On November 25, 2022, the company issued an announcement stating that in terms of information disclosure and standardized operation, the relevant responsible persons had violated the rules in the performance of their duties, such as "providing loans to related parties in violation of regulations" and "failing to timely disclose the provision for impairment of large assets", and the Shanghai Stock Exchange issued regulatory warnings to the relevant responsible persons.
Previously, in 2019, Zhang Jinyu, a shareholder of more than 5% of the shares of Pan Micro Network Company, traded 47,600 shares of the company in violation of regulations, making a profit of 28,084 yuan.
In addition, unnamed pharmaceuticals also have serious compliance problems, and in recent years, they have been investigated by regulatory authorities for many times due to unqualified information disclosure and other reasons, and have received "warning letters" from regulators.
The performance fell sharply and the stock price was sluggish
In terms of performance, the net profit attributable to the parent company of Pan Micro Network has declined seriously in recent years. In the first three quarters of 2023, the company's operating income was 1.398 billion yuan, a year-on-year increase of 3.95%; The net profit attributable to the parent company was 11 million yuan, a year-on-year decrease of 90.79%. The net profit after deducting non-attributable to the parent company was -13 million yuan, a year-on-year decrease of 127.26%.
In 2022, the company's operating income will be 2.331 billion yuan, an increase of 16.41% year-on-year; The net profit attributable to the parent company was 223 million yuan, a year-on-year decrease of 27.69%. The net profit after deducting non-attributable to the parent company was 123 million yuan, a year-on-year decrease of 40.65%.
Pan Micro Network landed on the A-share market in January 2017, and the company's share price reached an all-time high of 93.25 yuan per share in April 2023, and then fell all the way, and the current stock price has fallen 4% from the April high.
Another stock bought by Shenwan Hongyuan Securities in the third quarter, unnamed medicine, also showed a downward trend. In the first three quarters of 2023, the company's operating income was 338 million yuan, an increase of 22.8% year-on-year; The net profit attributable to the parent company was 30 million yuan, a year-on-year decrease of 53.9%.
Shenwan Hongyuan Securities: The fourth largest shareholder of the new Pan Micro Network
In the case that a number of violations of the Pan Micro Network have been publicly disclosed, and the credit disclosure rating has been D for two consecutive years, Shenwan Hongyuan Securities, as an investment institution with a strong investment research team and rich trading experience, became the fourth largest shareholder of the company in the third quarter of this year, holding 5.5056 million shares of the Pan Micro Network, accounting for 2.11% of the outstanding A shares.
Shenwan Hongyuan Securities Co., Ltd. was established on January 16, 2015 by the merger of Shenyin & Wanguo Securities Co., Ltd., the first joint-stock securities company in New China, and Hongyuan Securities Co., Ltd., the first listed securities company in the domestic capital market.
Liu Jian, chairman of Shenwan Hongyuan Securities, is currently the Secretary of the Party Committee of Shenwan Hongyuan Group Co., Ltd. and Shenwan Hongyuan Securities Co., Ltd., the chairman and director of the executive committee of Shenwan Hongyuan Group Co., Ltd., and the chairman and director of the executive committee of Shenwan Hongyuan Securities Co., Ltd.
On August 29, Shenwan Hongyuan Securities announced that Yang Yucheng would no longer serve as the general manager, deputy director and member of the executive committee of Shenwan Hongyuan Securities, and Liu Jian, chairman of the board, would act as the general manager for no more than 6 months.
It is worth noting that Yang Yucheng previously served as the chief inspector of Shenwan Hongyuan Securities, and after Yang Yucheng's resignation, the successor to the post of chief inspector was not mentioned in the relevant personnel change announcement.
As a veteran asset management institution and an important member of China's capital market, Shenwan Hongyuan Securities newly holds stocks that have been investigated by regulators, have a credit disclosure rating of D for two consecutive years, and have experienced a decline in performance. How should Liu Jian, chairman and acting general manager, make up for the shortcomings of risk control in the future?
Further discussion, the new holdings of some obviously problematic stocks, Shenwan Hongyuan Securities in the process of operation of whether there is a transfer of interests?
(Article Serial Number: 1722183691263938560)
Disclaimer: This article does not constitute any investment advice to anyone. Intellectual Property Rights Statement: The intellectual property rights of Bread Finance works are owned by Shanghai Miaotan Network Technology Co., Ltd.