On the evening of January 2, Lianjian Optoelectronics (300269. SZ) issued an announcement on the payment of back taxes, and the Fourth Inspection Bureau of the Shenzhen Taxation Bureau of the State Administration of Taxation required the company to recover 19.795 million yuan. It is predicted that this matter will affect the company's net profit in 2023 by about 40 million yuan.
It is worth mentioning that the radical expansion of Lianjian Optoelectronics in the early years laid hidden dangers for the company's later development, and the company's performance plummeted after the goodwill thunderstorm in 2018. In the past five years, Lianjian Optoelectronics has been in a state of loss for half of the time, with a cumulative loss of more than 1.7 billion yuan.
In the first three quarters of 2023, Lianjian Optoelectronics' performance has improved, turning losses into profits year-on-year, with a net profit of 42.9039 million yuan.
Guangdong Nanfeng Investment Co., Ltd. (hereinafter referred to as "Nanfeng Investment"), as the controlling shareholder of Lianjian Optoelectronics, donated 40 million yuan in cash to the company at a critical moment to help it pay the corporate income tax and late fees of the previous year.
In the secondary market, due to the popularity of the MicroLED concept, Lianjian Optoelectronics has deviated from the closing price by more than 30% for three consecutive trading days, and then fell back today (January 3). As of the close, the company's share price closed at 6.11 yuan, down 5.27%, and was on the list of dragons and tigers due to a turnover rate of 31.31%.
In the early days, the company frequently acquired and buried mines, and the company recovered 19.795 million yuan in taxes due to performance compensation
Lianjian Optoelectronics' tax payment incident is related to the company's crazy mergers and acquisitions in the early years.
According to public information, Lianjian Optoelectronics was listed in 2011, and the company's main business is the manufacture and sales of LED application products. In 2014, three years after its listing, the company embarked on the path of mergers and acquisitions.
In 2014, in order to enter the advertising media industry, Lianjian Optoelectronics acquired 100% equity of time-sharing media at a premium of 860 million yuan, and generated goodwill of 711 million yuan. Subsequently, in 2015, Lianjian Optoelectronics spent 949 million yuan to acquire two companies, Youtuo Public Relations and Yishida, forming a total of 755 million yuan of goodwill.
In 2016, Lianjian Optoelectronics spent 3.025 billion yuan to acquire 9 companies mainly engaged in Internet marketing and outdoor advertising, including Precision Focus and Sino-Ocean Culture, generating a total of 2.633 billion yuan of goodwill. In 2017, Lianjian Optoelectronics acquired 100% equity of Aipu New Media for 627 million yuan, confirming goodwill of 539 million yuan. So far, the above-mentioned targets have generated a total of 4.638 billion yuan of goodwill.
It is worth noting that the performance of most of the target companies did not meet the target. In 2017, Lianjian Optoelectronics found that from 2014 to 2016, some of the revenues and costs of the target companies were inaccurately recognized by Timeshare Media, Precision Focus and Sino-Ocean Culture, and then retrospectively adjusted the financial data of the previous period, resulting in the failure to meet the promised performance in the early stage.
According to the VAM agreement, the counterparty is required to pay performance compensation to the company in the form of share repurchase cancellation or cash compensation. Since the VAM was designed according to the actual situation of the target company, including equity repurchase, cash compensation and other measures, the process was complex, and the relevant tax treatment was not clearly documented in the theoretical and practical process in the field of tax law at that time.
Based on the relevant provisions of the tax law at that time and the relevant treatment of other listed companies in the market, the company counted the performance compensation recognized by the counterparty as the non-operating income for the current period. It is reported that in 2017, the non-operating income of Lianjian Optoelectronics was 351 million yuan, of which the performance compensation was about 345 million yuan.
However, there was an underdeclaration of tax on the performance compensation. According to the announcement of the supplementary tax payment, the Fourth Inspection Bureau of the Shenzhen Taxation Bureau of the State Administration of Taxation inspected the company's tax-related situation from 2017 to 2022, and after investigation, Lianjian Optoelectronics undercounted the taxable income of enterprise income tax of 132 million yuan in 2017, resulting in the failure to declare and pay the enterprise income tax of 19.795 million yuan in 2017.
In this regard, Lianjian Optoelectronics said that the payment of back taxes and late fees is not an accounting error in the previous period, and does not involve the retrospective adjustment of financial data in the previous period. However, the company's supplementary payment of the above-mentioned taxes and late fees will be included in the current profit and loss in 2023, which is expected to affect the company's net profit in 2023 by about 40 million yuan.
The controlling shareholder sent charcoal in the snow
Lianjian Optoelectronics' large-scale acquisition in the early stage laid hidden dangers for the company's own operation, and finally broke out in 2018, when the company made a provision for goodwill impairment of 2.732 billion yuan in that year, resulting in a huge loss of 2.888 billion yuan for the company.
Since then, the company's performance has gone downhill. From 2019 to 2022, the company's net profit attributable to the parent company was -1.381 billion yuan, -316 million yuan, 61.1615 million yuan, and -57.9503 million yuan respectively, and the company was in a state of losing more and earning less, with a cumulative loss of more than 1.7 billion yuan. In the first three quarters of 2023, the company's net profit was 42.9 million yuan, a year-on-year turnaround. From the perspective of net profit, this back tax has a greater impact on the company.
Faced with such a dilemma, Nanfeng Investment, the controlling shareholder of Lianjian Optoelectronics, extended a helping hand. On the evening of January 2, Lianjian Optoelectronics issued an announcement on the donation of cash assets and related party transactions at the same time as the announcement of the payment of back taxes, saying that it negotiated with the controlling shareholder Nanfeng Investment that it planned to donate 40 million yuan in cash to the company, and Lianjian Optoelectronics did not need to pay the consideration and did not attach any obligations. The main purpose of the donated funds is to pay the corporate income tax and late fees of the previous year by the company.
In fact, Nanfeng Investment will become the owner of Lianjian Optoelectronics in 2022, less than two years ago. In July 2022, Nanfeng Investment bid for 83,649,400 shares pledged and auctioned by the former controlling shareholder of Lianjian Optoelectronics for 215 million yuan, becoming the controlling shareholder of Lianjian Optoelectronics, and the actual controller of the company was also changed to Tan Weiliang.
It is reported that Nanfeng Investment is 100% owned by Nanfeng Group, and its business scope includes real estate development and operation, investment in cultural tourism projects, and leasing of its own properties. According to the official website of Nanfeng Group, Nanfeng Group is mainly involved in mainstream businesses including real estate, environmental protection, passenger transportation, industry, shipping, etc., of which real estate business accounts for nearly 1/3 of the group's business.
Tan Weiliang currently serves as the chairman of Lianjian Optoelectronics. It is worth mentioning that Tianyancha information shows that Tan Weiliang has worked in environmental protection companies and energy technology companies, and has no experience in the LED industry.
Regarding the investment in Lianjian Optoelectronics, Tan Weiliang once said that this is a transformation move by Nanfeng Group to take advantage of the trend, and the smart city-related technology business of Lianjian Optoelectronics and Guangdong Rongwen Technology, a subsidiary of Nanfeng Group, will have a synergistic effect.
At present, Lianjian Optoelectronics fully focuses on the core business of LED display and divests the previously acquired subsidiary. In the first half of 2023, the company disposed of two loss-making subsidiaries and received a gain of 16.8917 million yuan, thanks to which the company's net profit turned into a profit year-on-year to 26.94 million yuan.
In the second half of 2023, Lianjian Optoelectronics will transfer 100% of the previously acquired shares of Precision Focus and 89.8206% of the shares of Aipu New Media. As of December 15, 2023, the company has received payments from relevant counterparties, totaling 77.4216 million yuan, and has completed the relevant industrial and commercial change registration equity delivery procedures for the above two companies. (This article was first published in Titanium Media APP, author|Li Ruohan)